The consumer confidence index this month declined by 10.14 points to a five-year low of 63.37, dragged mainly by drastic corrections on the local bourse, a report released yesterday by National Central University showed.
It was the steepest fall in history and reversed six straight months of upturn, said Dachrahn Wu (吳大任), director of the university’s Research Center for Taiwan Economic Development, which conducted the monthly survey.
The April 3 earthquake, which measured magnitude 7.2 on the Richter scale, and ensuing aftershocks are also to blame, even though the six subindices lost points, Wu added.
Photo: CNA
Confidence values of 100 and higher suggest optimism and points lower than the neutral threshold indicate pessimism.
The reading on stock investment was 24.65, falling an unprecedented 38.76 points from one month earlier, as the TAIEX tumbled more than 1,000 points during the survey period between April 18 and April 21, Wu said.
The TAIEX dropped 3.81 percent on April 19, one day after chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) painted a lukewarm picture for global chip demand for the rest of this year.
Foreign institutional players slashed holdings of local shares by NT$704.79 billion net, which saw the local currency fall to an eight-year low.
There is no need to assign excessive importance to the investment confidence measure, which is volatile and susceptible to political and economic shocks at home and abroad, Wu said.
The TAIEX yesterday reclaimed recent highs, thanks to a spillover effect linked to robust earnings by US technology giants.
The job market subindex fell 5.69 points to 64.72, while the gauge on future household income levels softened 4.85 points to 74.65, the survey showed.
Safety concerns and the many aftershocks would dampen interest in domestic tourism, especially in mountainous areas, which would take a toll on job opportunities in hospitality sectors, Wu said.
Several lodging facilities in Hualien County have temporarily suspended operations, with a few exiting the market for good.
Wu said he is personally skeptical that private consumption would be strong this year after two straight years of rapid expansion.
Public confidence in the nation’s economy for the next six months dropped 4.08 points to 79.6, as geopolitical tensions heighten and the US Federal Reserve could reconsider interest rate cuts amid stubborn inflation, the report said.
Meanwhile, the subindex on consumption of durable goods declined 4.04 points to 107.8, staying in healthy territory, the report showed.
The April 3 earthquake would have significant influence on house prices, as prices of apartments built with better temblor resistance would increase, Wu said.
People also remain discontent about retail prices, with the gauge seeing a reduction of 3.47 points to 28.78.
DIVIDED VIEWS: Although the Fed agreed on holding rates steady, some officials see no rate cuts for this year, while 10 policymakers foresee two or more cuts There are a lot of unknowns about the outlook for the economy and interest rates, but US Federal Reserve Chair Jerome Powell signaled at least one thing seems certain: Higher prices are coming. Fed policymakers voted unanimously to hold interest rates steady at a range of 4.25 percent to 4.50 percent for a fourth straight meeting on Wednesday, as they await clarity on whether tariffs would leave a one-time or more lasting mark on inflation. Powell said it is still unclear how much of the bill would fall on the shoulders of consumers, but he expects to learn more about tariffs
NOT JUSTIFIED: The bank’s governor said there would only be a rate cut if inflation falls below 1.5% and economic conditions deteriorate, which have not been detected The central bank yesterday kept its key interest rates unchanged for a fifth consecutive quarter, aligning with market expectations, while slightly lowering its inflation outlook amid signs of cooling price pressures. The move came after the US Federal Reserve held rates steady overnight, despite pressure from US President Donald Trump to cut borrowing costs. Central bank board members unanimously voted to maintain the discount rate at 2 percent, the secured loan rate at 2.375 percent and the overnight lending rate at 4.25 percent. “We consider the policy decision appropriate, although it suggests tightening leaning after factoring in slackening inflation and stable GDP growth,”
Greek tourism student Katerina quit within a month of starting work at a five-star hotel in Halkidiki, one of the country’s top destinations, because she said conditions were so dire. Beyond the bad pay, the 22-year-old said that her working and living conditions were “miserable and unacceptable.” Millions holiday in Greece every year, but its vital tourism industry is finding it harder and harder to recruit Greeks to look after them. “I was asked to work in any department of the hotel where there was a need, from service to cleaning,” said Katerina, a tourism and marketing student, who would
i Gasoline and diesel prices at fuel stations are this week to rise NT$0.1 per liter, as tensions in the Middle East pushed crude oil prices higher last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. International crude oil prices last week rose for the third consecutive week due to an escalating conflict between Israel and Iran, as the market is concerned that the situation in the Middle East might affect crude oil supply, CPC and Formosa said in separate statements. Front-month Brent crude oil futures — the international oil benchmark — rose 3.75 percent to settle at US$77.01
RSS