Wednesday, February 9, 2011

Taiwan's Consumer Confidence Rebounding

l  According to the latest poll released by the National Central University (NCU), Taiwan's consumer confidence index (CCI) reached its highest point ever in January, indicating the public remains optimistic about the island's economy in the future.

l  Based on the NCU poll, Taiwan's CCI was 86.78 in January, the highest since NCU began doing the survey in 2001. An increase was seen for all six categories under CCI, which included prices for goods, plans to invest in stocks, Taiwan's overall economic prospects, employment outlook, disposable household income, and demand for durable goods.

l  Among the many reasons for the continued increases in the CCI, the optimistic outlook can be largely attributed to the fact that the ongoing surge in the New Taiwan dollar (NTD) has lowered the cost of many products, particularly imports, and the recent calls by top government officials to increase wages for employees in both public and private sectors have also heightened confidence of individuals and families to invest and plan for the future.

l  However, there were also signs for concern, particularly among those 40 and under. There seemed to be growing concerns about their personal and family finances in the future. As a result, these consumers may become more conservative and their consumption more inhibited.

l  Since consumption, along with the island’s exports, will play a key role in driving up Taiwan's economic performance this year, the island’s overall economic growth in 2011 could depend on if individuals actually receive pay raises and their disposable income increases.

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