Taiwan's consumer confidence has dimmed again, with more than half of people foreseeing the economy to deteriorate in the coming six months, according to the results of a recent survey by Cathay Financial Holding Co.
The monthly online survey, conducted Aug. 1-7, found that the individual consumer confidence index for the local economy dropped to minus 33.1 this month from minus 21.8 in July, the financial group said.
The Cathay-designed index staged a rebound in July after declining for several months, but faltered again in this month.
Cathay economists said the government's recent large cut of 2012 GDP growth forecast to 2.08 percent has seriously affected local people's confidence in the domestic economic well-being.
A combination of other factors, ranging from inflation figures to U.S. Federal Reserve's policy uncertainty and the eurozone debt problems, have led to further weakening in consumer confidence, the analysts said.
The following are excerpts from local media coverage of the Cathay survey on consumer economic confidence:
United Evening News:
The inflationary pressure expected by respondents increased amid rises in vegetable, meat and fuel prices, with the index for inflation expectation surging from 64.2 in July to 72.7 this month, the survey found.
Respondents to the Cathay survey rated each question on a scale of 200, with 100 indicating a very positive response and minus 100 signaling a very negative response.
In the latest survey, 75.2 percent of the respondents said they expect domestic consumer prices to hike further in the coming six months.
Respondents also forecast prices for daily necessities to rise by an estimated 3.6 to 4 percent in the coming half year, compared to 3.4 to 3.8 percent hike forecast in the July survey.
While the predicted inflation rate did not hit a new high, the lingering inflationary concern may dampen the hope that the Central Bank of the Republic of China would lower its key interest rates in September, Cathay analysts said.
Pessimism about the domestic economic outlook, coupled with the recent implementation of real-property value registration system and stricter credit control for luxury homes, the home buying index
maintained at the same level as in July at minus 58.2.
The survey also found that 46.5 percent of the respondents did not intend to buy real estate over the coming year; only 16.8 percent said the new real-value registration system has enhanced their interest in buying real estate.
Most of those who plan to buy new houses in the coming year said their procurement plan is driven by real demand rather than by investment purposes, the survey found. (Aug. 16, 2012).
According to the Cathay survey, 51 percent of the respondents forecast that the domestic economy will worsen further in the coming half year.
"The finding indicates that consumer confidence is weakening," said a Cathay analyst.
He added that the government should cope with this adverse trend with caution and prudence.
On the local stock market prospects, 43.4 percent said the benchmark index could decline in the next six months and only 22.3 percent said they expect the index to rise.
Meanwhile, only 14.5 percent said they plan to pump their cash and bank deposits into the stock market.
A total of 13,126 valid samples were collected online from the Cathay group's clients in the survey. (Aug. 16, 2012).
(By Sofia Wu)