Confidence in the local economy improved this month as Taiwan’s export-oriented economy continued to benefit from the global artificial intelligence (AI) boom, a survey released today by Cathay Financial Holding Co (國泰金控) showed.
Cathay Financial, Taiwan’s largest financial holding company in terms of total assets, said confidence was also boosted by the latest composite index of economic indicators for April released by the National Development Council at the end of last month, which showed a red hot economy.
Optimism that the US and Iran would agree to a ceasefire to ease tensions in the Middle East also helped improve sentiment toward the domestic economy, Cathay Financial said.
Photo: CNA
Citing a survey conducted from June 1 to 7, Cathay Financial said 52.5 percent of respondents said the economy improved this month, while 20.6 percent believed it deteriorated.
These results translated into a current-month economic optimism index of about 32 this month, up from 12 last month.
In addition, the six-month economic outlook index also improved, rising from 7.4 last month to 25.5 this month.
With sentiment over the economy improving, consumers appeared more willing to spend. The index for willingness to buy big-ticket items rose from 13.1 last month to a new high of 21.6 this month, and the index for willingness to buy durable goods rose from minus 6.7 to minus 0.8.
In addition, this month’s index on wage expectations topped previous records to hit 18.8, up from 14.6 last month, the survey found.
The optimism index for the local stock market rose from 45.5 last month to 54.5 this month amid optimism toward listed companies’ profitability on AI gains, while the index gauging willingness to take risks also rose from 34.4 to 40.6.
Respondents pegged Taiwan’s economic growth at 7.12 percent this year on average, with 59 percent of respondents saying they expected annual growth to top 7 percent, this month’s survey showed.
The figures showed respondents were generally more cautious than the government, as the Directorate General of Budget, Accounting and Statistics (DGBAS) estimated the local economy will grow 9.64 percent this year.
The poll also found respondents expected growth in the local consumer price index (CPI) to reach 2.26 percent on average this year, while about 58 percent anticipated the CPI would exceed 2 percent for the year, above the alert level set by the central bank.
The DGBAS has forecast CPI growth would hit only 1.93 percent this year.
The survey collected 13,376 valid online questionnaires from clients of Cathay Life Insurance and Cathay United Bank, which are wholly owned by Cathay Financial.
