Confidence in local economy improves in June: Poll

Taipei, June 21 (CNA) Confidence in Taiwan's economy improved in June on the back of government data showing continued signs that the economic conditions kept warming, according to a survey released by Cathay Financial Holding Co. on Friday.

Citing a poll conducted from June 1-7, Cathay Financial, Taiwan's largest financial holding firm by total assets, said that 16.5 percent of respondents believed the economy improved in June, while 57.8 percent said it had worsened.

These results translated into a current-month economic optimism index of minus 41.3, up from minus 55.3 in May.

The six-month economic outlook index also improved, rising to minus 32.7 in June from minus 42.2 the previous month.

Cathay Financial attributed the more positive sentiment to the National Development Council's latest economic monitoring data, which showed a "yellow-red light" for April, indicating a warming trend, for the fourth consecutive month.

Reflecting this growing optimism, the index measuring willingness to buy big-ticket items, such as cars, rose to minus 1.7 in June from minus 8.6 in May. Meanwhile, the index for purchasing durable goods climbed to minus 19.6 from minus 22.7.

Easing concerns over U.S.-China trade tensions also contributed to improved market sentiment, Cathay Financial said. The stock market optimism index rose to minus 5.5 in June from minus 10.8 in May, and the risk appetite index turned positive, increasing to 1.5 from minus 1.1.

Respondents projected Taiwan's 2025 economic growth at an average of 2.61 percent, up 0.12 percentage points from May. However, 63 percent of respondents still expected annual growth to remain below 3 percent. For comparison, preliminary data showed Taiwan's economy expanded 4.84 percent in 2024.

Despite the improved sentiment, the public remained more cautious than the government. The Directorate General of Budget, Accounting and Statistics (DGBAS) in late May forecast GDP growth of 3.10 percent for 2025.

Regarding inflation, 68 percent of respondents expected Taiwan's consumer price index (CPI) to rise above the central bank's 2 percent warning threshold in 2025, with an average inflation estimate of 2.30 percent. The DGBAS, however, predicted inflation would ease to 1.88 percent next year, down from 2.18 percent in 2024.

The survey collected 12,718 valid responses from clients of Cathay Life Insurance and Cathay United Bank, both subsidiaries of Cathay Financial.