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Taiwan consumer confidence reaches 2-year high in February

02/27/2024 06:14 PM
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Shoppers line up to get into a coffee shop in this CNA file photo
Shoppers line up to get into a coffee shop in this CNA file photo

Taipei, Feb. 27 (CNA) Consumer confidence in Taiwan reached a two-year high in February, driven by bullishness over the local stock market, according to the latest results of a monthly survey released by National Central University on Tuesday.

The Consumer Confidence Index (CCI) rose to 73.22 in February, up 1.08 from January and the highest level since March 2022, when the CCI was 72.24, the university's Research Center for Taiwan Economic Development said in a statement.

It was also the fifth consecutive month-over-month increase in the index after falling to 66.73 in September 2023.

The latest CCI, based on a survey conducted from Feb. 18-21, gauges the level of confidence people have over the next six months toward employment prospects, family finances, consumer prices, the local economic climate, the stock market, and the likelihood of purchasing durable goods.

Five of the six sub-indexes that comprise the CCI increased in February, with the stock market sub-index rising the most, by 3.17 points to 61.85, the highest level in four years.

The last time the stock market sub-index was that high was February 2020, when it hit 65.50.

The only sub-index that decreased was confidence in purchasing durable goods over the next six months, which dipped to 112.02, down 0.06 points from January, the survey found.

The durable goods sub-index still remained above 100 points, however, making it the only sub-index indicating optimism.

Index scores of 100 or above indicate optimism, while scores of under 100 indicated pessimism.

Dachrahn Wu (吳大任), director of the Economic Research Center, attributed the growing confidence in the stock market to continuing growth in artificial intelligence-related stocks and contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC).

As of Tuesday, for example, the Taiex closed at 18,854.41 points and TSMC closed at NT$698 (US$22.10), compared to 17,995.03 points and NT$644.00, respectively, at the close on Jan. 26.

Wu noted that the outbreak of the Russia-Ukraine war in February 2022 resulted in inflationary pressure and higher interest rates worldwide, which brought down the index, but those pressures have now receded.

In addition to the spike in the stock market sub-index, Wu said people's confidence related to employment prospects, family finances, and economic climate all reached 2.5-year, 2-year, and 1.5-year highs, respectively, suggesting that the CCI has returned to pre-war levels.

Wu cautioned, however, that sluggish demand in foreign markets will likely limit export growth, which could hold back export-oriented Taiwan's economy in the coming months.

The university's CCI survey in February collected 3,020 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 Chao Yen-hsiang)

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