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Sentiment toward domestic economy weakens in April

2018/04/21 17:33:34

Taipei, 21 (CNA) Sentiment toward the local economy weakened in April as investors turned cautious about job market prospects and a possible increase in wages, according to Cathay Financial Holding Co.

Citing the results of a survey, Cathay Financial said that 22.9 percent of the respondents said the local economy has improved from six months earlier, while 39.7 percent said the economic fundamentals deteriorated from six months earlier.

The figures sent the economic optimism index over the current economy for April to minus 16.8 (reflecting the difference between pessimistic and optimistic respondents) from minus 12.8 seen in March, according to the survey results.

Meanwhile, the economic optimism index for the next six months also fell to minus 20.8 in April from March's minus 17.6, the survey indicates.

According to Cathay Financial, the two indexes both fell for the second consecutive month to a one-year low, due to caution toward the job market and wage increases, although the latest composite index of monitoring indicators issued by the National Development Council for February flashed a green light, pointing to stable growth.

The survey shows that the optimism index toward the local job market over the next six months fell to minus 28.5 in April from minus 24 in March, while the optimism toward an increase in wages over the next six months also fell to 0.5 from 3.3.

In addition, the optimism index toward the local stock market dropped to minus 19.4 in April from minus 16.4 in March as the weighted index on the Taiwan Stock Exchange has been moving in consolidation mode in recent sessions, the survey results indicate.

Cathay Financial said the index about equity investors' appetite for risk fell for the third consecutive month to minus 4.2 in April from March's minus 2.7.

The silver lining is that the index gauging the willingness to buy big-ticket items rose slightly to 3.9 in April from 3.0 seen in March, while the index assessing the willingness to buy durable goods also rose slightly to minus 16.8 from minus 16.9, Cathay Financial said.

In April, about 70.2 percent of the respondents said they expect the local economy will grow at a pace of more than 2 percent in 2018, down from 72.2 percent recorded in March, and they only foresaw average economic growth of 2.16 percent, below the government's forecast of 2.42 percent, Cathay Financial said.

The survey, conducted April 1-7, collected 20,708 valid questionnaires online from clients of Cathay Life Insurance and Cathay United Bank, which are 100 percent owned by Cathay Financial.

(By Han Ting-ting and Frances Huang)