Confidence in economy improves amid AI boom: Poll

Taipei, June 22 (CNA) Confidence in the local economy improved in June as Taiwan's export-oriented economy continued to benefit from the global AI boom, a survey released by Cathay Financial Holding Co. showed Monday.

Cathay Financial, Taiwan's largest financial holding company in terms of total assets, said confidence was also boosted by the latest composite index of economic indicators for April released by the National Development Council at the end of May, which showed a red hot economy.

Optimism that the United States and Iran would agree to a ceasefire to ease tensions in the Middle East also helped improve sentiment toward the domestic economy, Cathay Financial said.

Citing the survey conducted from June 1 to 7, Cathay Financial said 52.5 percent of respondents said the economy improved in June, while 20.6 percent believed it deteriorated.

These results translated into a current-month economic optimism index of about 32 in June, up from 12 in May.

In addition, the six-month economic outlook index also improved, rising from 7.4 in May to 25.5 in June.

With sentiment over the economy improving, consumers appeared more willing to spend. The index for willingness to buy big-ticket items rose from 13.1 in May to a new high of 21.6 in June, and the index for willingness to buy durable goods rose from minus 6.7 to minus 0.8.

In addition, the June index on wage expectations topped previous records to hit 18.8, up from 14.6 percent in May, the survey found.

The optimism index for the local stock market rose from 45.5 in May to 54.5 in June amid optimism toward listed companies' profitability on AI gains, while the index gauging willingness to take risks also rose from 34.4 to 40.6.

In the June survey, respondents pegged Taiwan's 2026 economic growth at 7.12 percent on average, with 59 percent of respondents saying they expected annual growth to top 7 percent, the survey found.

The figures showed respondents were generally more cautious than the government, as the Directorate General of Budget, Accounting and Statistics (DGBAS) estimated the local economy will grow 9.64 percent in 2026.

The poll also found respondents expected growth in the local consumer price index (CPI) to reach 2.26 percent on average in 2026, while about 58 percent anticipated the CPI would exceed 2 percent for the year, above the alert level set by the central bank.

The DGBAS has forecast the CPI growth will hit only 1.93 percent this year.

The survey collected 13,376 valid online questionnaires from clients of Cathay Life Insurance and Cathay United Bank, which are wholly owned by Cathay Financial.