Confidence in local economy mixed in February: Poll

Taipei, Feb. 22 (CNA) Confidence in the local economy appeared mixed in February with the index gauging current conditions rising while another index assessing the economic outlook declined, according to Cathay Financial Holding Co.

Citing a survey conducted from Feb. 1-7, Cathay Financial, Taiwan's largest financial holding firm by assets, noted that after the National Development Council reported on Feb. 5 that the composite index of economic indicators for December signaled a red light, suggesting a booming economy, about 29.3 percent of respondents said the economy had improved in February, while 35.7 percent said it had worsened.

This translated into an economic optimism index of about minus 6.4 for February, an improvement from minus 8.7 in January.

However, the economic optimism index for the next six months fell to minus 11.2 in February from minus 5.8 in January, following a decline in December leading indicators, the survey showed.

Amid volatility in global stock markets and U.S. President Donald Trump's threats of tariffs on imports, the survey found that the index measuring optimism toward the local stock market dropped sharply to 9.2 in February from 16.5 in January.

However, the index gauging the appetite for risk in the stock market increased slightly to 19.3 in February from 17.2 the previous month.

The survey revealed that 34 percent of respondents believed the tariff war could affect global trade and impact Taiwan's economic growth, while 43.1 percent said the performance of the U.S. stock markets is expected to influence Taiwan's equity market.

Respondents in the February survey projected Taiwan's 2025 gross domestic product growth at 2.84 percent, slightly down from 2.85 percent in a similar survey conducted in January, with 53 percent expecting annual growth to be below 3 percent.

This was more conservative than the Directorate General of Budget, Accounting and Statistics (DGBAS), which forecast in November that Taiwan's GDP would grow 3.29 percent in 2025.

The poll also found respondents expected growth in the local consumer price index (CPI) to reach 2.28 percent in 2025, unchanged from the January poll, while about 66 percent anticipated the CPI would average over 2 percent for the year, above the alert set by the central bank.

The DGBAS has forecast that inflation in 2025 will slow to 1.93 percent from 2.18 percent in 2024.

The survey gathered 16,815 valid online responses from clients of Cathay Life Insurance and Cathay United Bank, both wholly owned by Cathay Financial.