In the absence of policies to stimulate the economy, Taiwan's consumer sentiment continued to hover in the low 70s, although the consumer confidence index last month edged up slightly by 1.17 percentage points from September to 72.59.
The index report was released by National Central University's Research Center for Taiwan Economic Development yesterday, which interviewed 2,076 people between Oct. 18 and Oct. 23.
"The public confidence has dipped to rock bottom for months. It does not mean much for the index to rise, as generally consumer sentiment is still weak and pessimistic," said Shia Ben-chang (
The monthly survey asked respondents about their expectations in the following six areas ? stock performance, durable goods, household finances, job opportunities, consumer price fluctuations and the domestic economic outlook -- for the next six months.
Among them, sentiment toward purchases of durable goods, such as houses, cars and electric appliances, showed the biggest increase, 3.2 percentage points to 113.45 last month, the highest point since the survey started in January 2001.
The only area that declined is confidence toward the nation's economy, which dropped by 0.5 percentage points to 60.9 last month and has consecutively slid since February.
Shia said the result is not surprising as people tend to buy pricey goods whose values are maintainable when the economy slows down and savings rates are low.
The Chung-hua Institution for Economic Research (中經院) and the Taiwan Institute of Economic Research (台經院) both trimmed down their GDP growth forecasts for this year to 3.31 percent and 3.53 percent, respectively.
"Consumer sentiment is likely to continuously hover around the low end, unless the government really brings out policy stimuli to drive up public confidence," Shia said, adding the index will stay at the current level unless grave events such as an oil crisis or the suspension of the Fourth Nuclear Power Plant project occur.
Government officials should also pay attention to consumer worries about rising commodity prices, as a whopping 89.6 percent of respondents said they believe prices will increase over the next six months.
Around 64.3 percent said that they will stay away from the stock market in the next half year, showing weak confidence in the local bourse, according to the report.
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