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Confidence in economy improves in September: survey

2018/09/22 17:18:27

Taipei, Sept. 22 (CNA) Confidence in Taiwan's economy edged higher in September after the government said economic growth in the first half of the year was brisker than originally projected, according to a survey by Cathay Financial Holding Co.

Cathay Financial, one of Taiwan's leading financial holding companies, said the more optimistic outlook toward the economy was also helped by upward revisions of projections for GDP growth for 2018 as a whole.

According to the survey, 18 percent of respondents said the economy had improved from six months earlier, while 47.5 percent said the economy was worse.

That translated to an economic optimism index figure for the economy of minus 29.5 in September, up from minus 29.7 in a similar poll conducted in August, when the index ended a five-month losing streak.

The economic optimism index for economic conditions over the next six months also rose to minus 28.8 in September from minus 31.5 in August, also ending five straight months of decline.

In mid-August, the Directorate General of Budget, Accounting and Statistics raised its forecast for Taiwan's 2018 GDP growth to 2.69 percent, from an earlier estimate of a 2.60 percent increase made in May.

The upward revision followed a DGBAS report saying that Taiwan's economy grew 3.10 percent in the first quarter and 3.30 percent in the second quarter, up from preliminary readings of 3.02 percent and 3.29 percent, respectively.

Cathay Financial's survey for September was conducted from Sept. 1 to 7, after the DGBAS reports came out.

The improved outlook toward the economy was also reflected in a slightly more optimistic view of Taiwan's labor market, though pessimism still reigned.

The optimism index for the labor market for the next six months rose from minus 36.4 in August to minus 33.9 in September, Cathay Financial said.

The optimism index for the labor market right now also rose from minus 34.2 in August to minus 32.4 in September, the financial conglomerate said.

The slight gain in confidence was also seen on the wage front.

The index gauging a perceived improvement in wages over the past six months rose to minus 2.6 in September from minus 3.3 in August, and the index gauging confidence in wage increases over the next six months also grew to minus 0.8 from minus 3.0, according to the survey.

A more upbeat mood toward the economy meant that consumers appeared more willing to spend, Cathay Financial said.

The index gauging the willingness of consumers to buy big ticket items rose from minus 5.9 in August to minus 5.0 in September, while the index on their willingness to purchase durable goods also grew from minus 24.3 in August to minus 21.1 in September, the survey found.

Optimism toward the local stock market rose from minus 22.4 in August to minus 20.1 in September, while the index gauging investors' appetite for risk rose from minus 9.2 to minus 8.5.

Cathay Financial said the average GDP growth for 2018 expected by respondents to the September survey was 2.3 percent, unchanged from a month earlier, indicating investors appear more cautious than the government.

The survey results were based on 15,846 valid online questionnaires from clients of Cathay Life Insurance and Cathay United Bank, which are 100 percent owned by Cathay Financial.

(By Tien Yu-pin and Frances Huang)
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