Confidence in local economy improves amid eased COVID-19 concerns

09/25/2021 08:48 PM
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CNA file photo
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Taipei, Sept. 25 (CNA) Confidence in Taiwan's economic conditions improved in September from a month earlier as the government continued to ease restrictions due to a domestic COVID-19 outbreak being gradually contained, according to a survey conducted by Cathay Financial Holding Co.

Cathay Financial said that with worries over the pandemic reduced, the National Development Council (NDC) reported another "red light" in its composite index of monitoring indicators to show strong growth in the economy for July, despite the leading indicators moving lower. The NDC is scheduled to report the composite index for August next week.

Citing a survey conducted during Sept. 1-7, Cathay Financial said 49.8 percent of respondents said the local economy will improve over the next six months, while 22.8 percent think it will deteriorate.

The figures translate into an economic optimism index over the next six months of 27 in September, up from 22.1 recorded in August, according to the survey.

Moreover, the economic optimism for the current economic climate rose sharply to minus 4.5 in September from minus 28.2, the survey found. The survey collected 22,037 valid online questionnaires from clients of Cathay Life Insurance and Cathay United Bank, which are fully owned by Cathay Financial.

Cathay Financial said the improved economic sentiment was also apparent with investors' faith in the stock market.

In September, the optimism index toward the local equity market over the next six months rose to 15.9 from 11.8 in August, while the index gauging the willingness to take risks in the financial market rose to 12.5 from 10.8, Cathay Financial said.

Due to the growing confidence in the economy, the survey showed, the index assessing the willingness to buy big-ticket items such as homes and cars rose to 15.7 in September from August's 12.0, and the index gauging the willingness to buy durable goods also grew to minus 8.2 from minus 12.2, Cathay Financial added.

The survey found the index expecting higher wages over the next six months rose to 4.3 in September from 0.4 seen in August, while the index on a wage increase for September also rose to minus 8.1 from minus 13.2.

Respondents in the September survey pegged Taiwan's 2021 economic growth at 4.23 percent, up from 4.17 percent in a similar survey in August, with 75 percent saying they expected annual growth to top 3 percent.

The survey indicated a more cautious attitude toward economic growth in 2021 than that of Taiwan's government. The Directorate General of Budget, Accounting and Statistics (DGBAS) in mid-August raised Taiwan's economic growth forecast by 0.42 percentage points to 5.88 percent.

The September survey pegged the local consumer price index (CPI) growth at 2.05 percent in 2021, higher than August's 2.03 percent. The DGBAS has forecast the CPI will rise 1.74 percent in 2021.

(By Su Ssu-yun and Frances Huang)

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