Nation displays cautious attitude toward economy

Consumer confidence this month slumped to the lowest level since July last year, suggesting that the public attitude toward economic prospects is turning cautious, researchers at the National Central University said yesterday.

The confidence score hit 73.86 points this month, two points down from last month's figure, they said at a press conference. The survey was conducted among 2,016 people between Aug. 18 and Aug. 22.

"Three-quarters of the respondents were worried about consumer-price fluctuations for the next six months as international oil prices remain sky-high, while other energy price hikes are likely to take place soon," said Chu Yun-peng (朱雲鵬), head of the university's Research Center for Taiwan Economic Development.

Soaring prices

To reflect the soaring fuel prices in their production costs, the state-run Taiwan Power Co (Taipower, 台電) and the Taiwan Water Supply Corp (台灣自來水) said earlier this month that they have plans to raise rates as early as next year.

The Great Taipei Gas Corp (大台北瓦斯), a major natural gas supplier in Taipei City, for instance, said it may raise prices by NT$0.72 per cubic meter to NT$12.96. It has maintained its current rates since 1993.

No inflation

While these factors have helped drive down consumer confidence, there is no immediate risk from inflation, Chu said.

"Compared with the first global energy crisis in 1973, we're still quite far away from that possibility as there is no sign of rapid economic expansion here in Taiwan now," Chu said.

Shia Ben-chang (謝邦昌), professor of statistics and information science at Fu Jen Catholic University, who also attended yesterday's conference, said the public should not panic over the likelihood of inflation, because the nation's central bank is well-tas-ked to manage interest rates and money supply, he added.

Respondents' sliding confidence in purchasing durable goods -- such as real estate, vehicles and large home appliances -- over the next six months might serve as a warning, but requires further observation before conclusions can be drawn, Shia said.

The monthly report gauges the public's expectations on stock performance, household finances, durable goods, job opportunities, consumer-price fluctuations and the economic outlook for the next six months.

According to the August survey, stock-market prospects dropped one point to 39.8 points, the lowest level since November 2001, with 75 percent of the respondents saying the next six months will not be a good time to buy shares.