The consumer confidence index this month dipped by 0.88 points month-on-month to 59.12, the weakest level in more than 13 years with all subindices showing that consumers are pessimistic about the next six months, a survey released yesterday by National Central University showed.
The confidence index was the weakest since 2000 when the Internet bubble burst and 2008 when the global financial crisis erupted, causing a global economic recession, university data showed.
Five of the six subindices were on the decline, while the gauge for inflation was up 0.05 points to 27.2 from the previous month, the survey showed.
Photo: CNA
The reading on the employment market plunged to its lowest level in about 12-and-half years, falling 0.55 points to 61.1, the survey showed.
That indicated that reductions in exports and fewer orders received by local manufacturers have started eroding household income and trimming local job opportunities, the university said.
The subindex on family finances dropped 0.55 points to 70.9, the lowest level since April 2010, indicating that finances have gotten worse, said Dachrahn Wu (吳大任), director of the university’s Research Center for Taiwan Economic Development.
Wu said the nation’s economy could face challenges in the coming year because of high inflation worldwide and the ongoing tightening of monetary policy by major central banks.
While people are pinning their hopes on stronger domestic demand to boost the economy and offset an expected decline in exports, those hopes might not be realized given that the manufacturing sector has yet to hit bottom and the labor market is weakening, he said.
As the central bank has raised interest rates four times this year, it has led to higher borrowing costs for about 2 million mortgage holders, he added.
The gauge of buying interest in durable goods over the next six months, mainly real estate, plummeted the most among all subindices, down 2.1 points month-on-month to 99.9.
The gauge on stock investment dropped 1.1 points to 20, marking the second-biggest decline among the subindices.
Since the beginning of this year, the TAIEX has fallen about 22 percent to close at 14,328.43 yesterday.
The subindex on the economic outlook over the next six months dropped 1.05 points to 75.6, the survey showed.
Asked when the nation’s economy might rebound, Wu said that unemployment in the US has to hit 5 percent or inflation needs to fall below 5 percent before the US Federal Reserve would stop raising interest rates and even consider cutting them.
That would help the global economy to recovery gradually, rekindling the potential for export growth in Taiwan, he said, forecasting that such a rebound could occur as soon as the second half of next year.
This month’s survey collected 2,870 valid questionnaires from consumers in Taiwan aged 20 and older from Dec. 18 to Wednesday last week.
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