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Public's confidence in economy slumps to two-year low: survey

2012/06/14 22:55:39

Taipei, June 14 (CNA) The public's confidence in Taiwan's economy slumped to its lowest level in two years, according to the results of a survey published by a local financial group on Thursday.

June's Economic Outlook Index hit a two-year low of -71.8 points and the Economic Optimism Index reached -52.6 points, showed the survey, conducted by Cathay Financial Holdings, which suggested the low levels reflected public concern about global and domestic factors further impacting the economy.

Taiwan's economic growth has been affected by the current global economic downturn, including the escalating European debt crisis and lowered economic growth forecasts in the United States and China, the company stated.

The European debt crisis has already had an impact on Taiwan's economy, with May's annual export growth rate falling to -6.3 percent, suggesting Taiwan's trading partners have been affected, it added.

In addition, Taiwan's Directorate-General of Budget and Accounting also revised its 2012 annual economic growth rate down to 3.03 percent on May 25, indicating the country's domestic economy is facing challenges, it added.

However, Cathay Financial's survey noted that due to oil prices falling for the past several weeks, the public has experienced some relief from rising commodity prices. The public's expectations of higher commodity prices index posted an improved score of 76.6 points on the index, compared with 89.9 points last month.

People's expectations of prices hikes in necessity goods for the next six months also improved from a range of 4.34-4.97 percent to 4.05-4.58 percent in June, indicating people expect lower inflation rates.

The survey also indicated people's optimism levels regarding salary raises and the bourse were low, but, compared with a month earlier, there was a slight increase in people's willingness to invest in durable goods or large consumer goods.

The survey, conducted June 1-7 by the Cathay group, retrieved 15,287 valid responses from clients of its insurance and banking arms.

(ByTien Yu-pin and C.J. Lin) ENDITEM/npw