Consumer confidence in December weakened as worries grow over the impact of rising consumer prices on family finances, National Central University (NCU) said Monday.
Citing a survey, conducted Dec. 18-21, the university said the consumer confidence index (CCI) for December fell 0.31 points from a month earlier to 73.02, with the sub-index on consumer prices dipping to the lowest level for 12 years, at a time when the local consumer price index continues to move higher.
The CCI gauges the level of confidence people have in the prospects for employment, family finances, consumer prices, the local economic climate, the stock market, and the likelihood of purchasing durable goods over the coming six months.
The sub-index on consumer prices for December fell by 1.3 points from a month earlier to 35.15, the lowest level since September 2009, when the figure stood at 29.95.
Dachrahn Wu (???), director of NCU’s Research Center for Taiwan Economic Development, told reporters that with the sub-index on consumer prices falling, worries over a further hike in consumer prices has picked up as many respondents in the poll fear the trend will increase their financial burden and hurt family finances.
As a result, the sub-index on family finances also dropped 2.6 points from a month earlier to 79.35 in December, the steepest fall among the six factors in the CCI, the survey found.
According to the Directorate General of Budget, Accounting and Statistics (DGBAS), Taiwan’s Consumer Price Index (CPI) rose 2.84 percent from a year earlier in November, the highest growth in 102 months, on the back of rising prices for fuel, fruit, vegetables and dining out as well as higher airfares.
It was the fourth consecutive month the local CPI has grown more than the 2 percent threshold set by the central bank. However, the bank has repeatedly said the increase in the CPI will be temporary as growth in international crude prices could moderate and mitigate the impact of consumer price growth in the domestic market.
The central bank has forecast the CPI will grow 1.97 percent in 2021 and growth is expected to moderate to 1.59 percent in 2022.
In addition, the sub-index on employment also moved lower by 1.55 points from a month earlier to 65.05 in December, the survey indicated.
Bucking the downturn, the sub-indexes for the stock market, the timing of purchases of durable goods, such as cars, and the local economic climate moved higher by 1.6, 1.55 and 0.4 points, respectively, from a month earlier to 50.4, 122.05 and 87.1 in December, the survey showed.
Despite the growth in the sub-index for the stock market, Wu said the figure remained in the mid-pessimism range as a recent spike in share prices has prompted many investors to turn cautious about a possible technical pullback.
Since the beginning of November, the Taiex, the weighted index on the Taiwan Stock Exchange, has soared 1,007.31 points or 5.81 percent after the index closed at an historical high of 18,048.94 on Monday.
Yao Jui (??), CEO of the Executive MBA program of the university’s Management Academic Research Center, said caution toward the equity market resulted from relatively high valuations, inflationary pressure and the tightening of monetary policy by major central banks around the world.
A sub-index score of 0-100 indicates pessimism, while a score of 100-200 shows optimism, NCU said, noting that optimism was seen in December only in the sub-index for the likelihood of purchasing durable goods over the next six months.
The NCU survey in December collected 2,874 valid questionnaires from local consumers 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.
Source: Focus Taiwan News Channel