A pedestrian walks past an ad promoting a new housing project. Home buyers turned cautious amid an amended home tax law and uncertainties created by the upcoming elections in the latest consumer confidence survey released on Dec. 27, 2023.
Taipei, Dec. 27 (CNA) Consumer confidence in Taiwan improved for a third consecutive month in December as a stock rally left people more optimistic over economic fundamentals, according to the latest Consumer Confidence Index (CCI) results released Wednesday.
The CCI for December, based on a survey conducted by National Central University (NCU) from Dec. 18 to Dec. 21, rose 0.66 points from a month earlier to 70.06, the highest since April 2022, when it was 71.77.
According to NCU, the CCI gauges the level of confidence people have toward employment prospects, family finances, consumer prices, the local economic climate, the stock market, and the likelihood of purchasing durable goods over the following six months.
Booming stock market
The sub-index on the stock market scored the largest gain of 2.75 points from a month earlier to 53.14 in December. The sub-index was also up 33.14 points from the same period of last year, according to NCU.
At a news conference, Dachrahn Wu (吳大任), director of NCU's Research Center for Taiwan Economic Development, said a booming stock market helped investors build wealth and made them more upbeat about the economy.
The Taiex, the Taiwan Stock Exchange's benchmark weighted index, has risen 3.49 percent since the beginning of December after a 7.14 percent rally in November on the back of large foreign fund inflows.
Also improving consumer sentiment was the resilience of the service sector in the post COVID-19 era, which has been fueled by strong domestic consumption.
Wu said the surge in the stock market failed, however, to reflect the weakness in the profitability of many export-oriented listed companies at a time of falling global demand, which could lead to stock volatility.
He expected the U.S. economy to slow down in 2024 because of its relatively high interest rates, which could also affect stock markets around the world, including Taiwan's.
Consumer prices, durable goods
The sub-indexes on consumer prices and the possibility of buying durable goods also moved higher by 1.57 and 0.65 points, respectively, from a month earlier to 29.96 and 111.93 in December, according to the survey.
Bucking the uptrend, the sub-indexes on employment, family finances and the local economic climate moved lower by 0.1, 0.41 and 0.51, respectively, from a month earlier to 67.32, 76.65 and 81.33 in December, the survey found.
In the NCU's surveys, a CPI sub-index score of 0-100 indicates pessimism, while a score of 100-200 shows optimism, the university said, noting that the only factor that showed optimism in December was the likelihood of purchasing durable goods over the next six months.
Home buying
Meanwhile, another NCU survey conducted jointly with Taiwan Realty showed a month-on-month decline of 0.97 points in December in the index for home buying, which stood at 105.61.
Chou Ho-ming (周鶴鳴), chief vice president of Taiwan Realty, said the decline came after the passage of an amendment to the House Tax Act by the Legislative Yuan to raise the tax on hoarding homes.
Uncertainty ahead of the upcoming presidential election has also made home buyers cautious, Chou said.
The university's CCI survey in December collected 2,996 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.
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