Confidence in local economy down significantly on Trump tariffs: Poll

Taipei, April 21 (CNA) Confidence in the local economy fell sharply in April, as sentiment was hit hard by U.S. President Donald Trump's on-again, off-again tariff policies, Cathay Financial Holding Co. said Monday.

Citing a survey conducted April 1-7, Cathay Financial, Taiwan's largest financial holding firm by assets, said 14.6 percent of respondents believed the local economy improved in April, while 59.1 percent of them thought the economy deteriorated during the month.

The figure translated into an economic optimism index for the current month of about minus 44.5, a significant fall from minus 16.4 in March.

In addition, the April economic optimism index for the next six months also dropped sharply to minus 41.3, from minus 21.2 in March, according to the survey.

Trump unveiled sweeping "reciprocal" tariffs on April 2 (U.S. time) that included an across-the-board 32 percent import duty on goods from Taiwan.

He then paused the new tariffs on April 9 -- after the survey period concluded -- deciding instead to apply a 10 percent duty to most countries except for China.

Cathay Financial did not break down its responses from before and after Trump announced his tariffs, so it was not clear how the announcement specifically affected respondents' outlook.

The overall index gauging the willingness to purchase big ticket items moved lower to minus 1.1 in April from 7.0 in March, and the index assessing the willingness to purchase durable goods also fell to minus 18.3 from minus 11.1, which Cathay Financial said reflected tariff uncertainty.

In addition, the survey found the index evaluating the willingness to buy homes fell to minus 50.3 in April from minus 48.0 in March, while the index assessing the willingness to sell homes also dropped to minus 20.3 from minus 17.6.

In the April survey, respondents pegged Taiwan's 2025 economic growth at 2.63 percent on average, down 0.14 percentage points from a poll in March, with 62 percent of respondents saying they expected annual growth to dip below 3 percent, the survey found.

The survey also found that 70 percent of respondents expected the local consumer price index (CPI) to increase 2.33 percent on average in 2025, above the 2 percent alert set by the central bank, Cathay Financial said.

On April 9, National Development Council head Paul Liu (劉鏡清) cited a preliminary analysis as saying that Taiwan's economic growth could shrink by as much as 1.61 percentage points to just 1.53 percent due to looming U.S. tariffs.

That was down from a forecast of 3.14 percent made by the Directorate General of Budget, Accounting and Statistics (DGBAS) in late February.

The DGBAS also forecast in February the local CPI would grow 1.94 percent in 2025.

The survey collected 13,693 valid online questionnaires from clients of Cathay Life Insurance and Cathay United Bank, which are wholly owned by Cathay Financial.