Confidence in Taiwan economy weakens amid Middle East conflicts: Poll

Taipei, April 20 (CNA) Confidence in Taiwan's economy weakened in April as sentiment was dampened by the ongoing military conflicts in the Middle East, according to a survey released by Cathay Financial Holding Co. on Monday.

Cathay Financial, the largest financial holding firm in Taiwan in terms of total assets, said 21.2 percent of its clients thought that the economy improved in April, while 53.4 percent said it had worsened, in a poll conducted April 1-7.

These poll results translated into an economic optimism index of minus 32.2 in April, down sharply from 18.2 in March.

The economic outlook index for the following six months also weakened, falling to minus 26.5 in April from 5.1 the previous month.

In a statement, Cathay Financial said although the latest economic composite index released by the National Development Council in March continued to show a booming domestic economy, the public remains wary of geopolitical unease, as the war in the Middle East has continued for more than a month, pushing up international crude oil prices.

Amid cautious sentiment toward the domestic economy, the index measuring willingness to buy big-ticket items, such as cars, fell to 3.7 in April from 16.0 in March, while the index measuring the willingness to purchase durable goods fell to minus 16.3 from minus 6.8, the survey showed.

With crude oil prices hovering at high levels, raising concerns over inflation, the stock market optimism index fell to 17.2 in April from 35.3 in March, while the index gauging the appetite to take risks also fell to 23.1 from 31.7, the poll indicated.

In addition, it found that 44 percent of the respondents expect home prices in the areas they lived to rise more than 3 percent over the next six months, while 20 percent think home prices will fall more than 3 percent over that period.

According to the poll, Taiwan's 2026 economic growth is projected to reach an average of 6.38 percent, with 37 percent of the respondents anticipating growth of over 7 percent.

The 6.38 percent growth forecast was more cautious than the 7.71 percent estimated by the Directorate General of Budget, Accounting and Statistics in February.

Regarding inflation, 60 percent of the respondents said Taiwan's consumer price index (CPI) in 2026 is likely to rise above the central bank's 2 percent warning threshold, with an average inflation rate of 2.27 percent. The DGBAS, however, has predicted inflation of no more than 1.68 percent this year.

The survey, which collected 13,242 valid responses, was conducted among clients of Cathay Life Insurance and Cathay United Bank, both subsidiaries of Cathay Financial.