Consumer confidence at lowest for nearly 12.5 years

‘SEVERELY WEAK’:
Interest rate hikes in the United States would discourage spending on technology products, weighing on Taiwan’s exports, said researcher Dachrahn Wu.

  • By Crystal Hsu / Staff Reporter

The consumer confidence index this month fell to 63.08, the lowest in almost 12.5 years, although it edged up 0.03 points from the previous month, as People remain cautious about the country’s economic outlook, consumer prices and household income, according to the results of a survey by the National Central University showed yesterday.

Dachrahn Wu (吳大任), director of the Taiwan Economic Development University Research Center, which conducted the survey, said consumer confidence remains very weak as the 0.03 point lead is statistically insignificant.

Confidence scores of 100 or more indicate optimism, while values ​​below the threshold suggest pessimism.

Photo: ANC

“Drastic increases in U.S. interest rates would crowd out consumer spending on technology products, which would hurt Taiwan’s exports and GDP growth,” Wu said after the U.S. Federal Reserve announced. Friday that it would raise rates next year to keep inflation under control.

Taking inspiration from Wall Street over the weekend, the TAIEX fell 2.31 percent to 14,926.19 points yesterday, according to data from the Taiwan Stock Exchange.

Fed Chairman Jerome Powell said a 75 basis point rate hike would likely dampen demand for goods and services next month, adding he was aware it would hurt businesses, employment and GDP growth.

INVESTMENT IN SHARES

The equity investment sub-index hovered around a record high of 24.8 recorded last month, after China’s military exercises in the Taiwan Strait prompted panic selling and the National Stabilization Fund was intervened, without much success so far.

Wu said export orders slipped into negative territory last month and will be even worse this month, with economic data from the United States and Europe confirming a bleak outlook.

The consumer price sub-index this month fell 0.4 points to 26.5, the lowest in 13 years and nine months, Wu said, adding that the weakness in sentiment extended to the subs. – indices on the labor market and household income.

The gauge on the economic outlook added 0.15 points to 79.7, while the reading on purchases of durable goods, mostly real estate, rose 0.4 points to 109.4, the survey showed.

Wu said the rise was too small to be significant and may not hold if conditions deteriorate.

The center interviewed 2,773 adults by phone from August 19 to 21. The survey has a margin of error of 2 percentage points.

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