Consumer confidence in Taiwan weakens to new low in over 13 years

11/28/2022 04:10 PM
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CNA photo Nov. 28, 2022
CNA photo Nov. 28, 2022

Taipei, Nov. 28 (CNA) At a time when the global economy has been hit by fast growing inflation and rising interest rates, consumer confidence in Taiwan for November weakened to the lowest level in more than 13 years, the National Central University (NCU) said on Monday.

Citing a survey conducted Nov. 18-21, NCU said the consumer confidence index (CCI) fell 1.22 points from a month earlier to 60.0 in November, the lowest level since September 2009, when the CCI stood at 56.45, indicating the latest CCI was the lowest since the 2008-2009 global financial crisis.

The November CCI also marked the third consecutive month of a decline, according to the survey.

The CCI gauges the level of confidence people have regarding employment prospects, family finances, consumer prices, the local economic climate, the stock market, and the likelihood of purchasing durable goods over the next six months.

In November, the sub-indexes on the six factors all moved lower, according to the survey.

Amid uncertainty over the economic outlook, consumers appeared more reluctant to spend, and the sub-index on the likelihood of purchasing durable goods lost 2.3 points from a month earlier to 102 in November, marking the steepest decline among the six factors in the CCI, the survey found.

The sub-indexes on local economic climate, family finances and employment moved lower by 1.8, 1.7 and 1.25, respectively, from a month earlier to 76.65, 71.45 and 61.65 in November, the survey showed.

In addition, the sub-indexes on the stock market and consumer prices also moved lower by 0.2 and 0.05 points, respectively, from a month earlier to 21.1 and 27.15 in November, the survey indicated.

Speaking with reporters, Dachrahn Wu (吳大任), director of the NCU's Research Center for Taiwan Economic Development, said he expected the worst has yet to come as the U.S. Federal Reserve and other major central banks will continue to tighten their monetary policy to fight inflation, which is expected to hurt global demand and hit exports-oriented economies like Taiwan.

Since March, the Fed has raised its key interest rates by 375 basis points and is expected to pursue a 50-basis point hike in December.

In recent weeks, Wu said, some manufacturers in Taiwan launched furlough programs for workers due to a decline in orders from foreign buyers. That is expected to contribute to further uncertainty over family finances and squeeze consumer confidence, Wu added.

As for the timing on buying a home, however, NCU cited a separate index jointly compiled by the NCU and Taiwan Realt saying the index stayed unchanged from a month earlier at 102.65.

According to the NCU, a CCI sub-index score of 0-100 indicates pessimism, while a score of 100-200 shows optimism. It noted that optimism was seen only in the sub-index on the likelihood of purchasing durable goods over the next six months.

The NCU survey in September collected 2,879 valid questionnaires from consumers in Taiwan aged 20 and over. It had a confidence level of 95 percent and a margin of error of plus or minus 2.0 percentage points.

(By Pan Tzu-yu and Frances Huang)


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