Taipei, Confidence in the local economy improved in August after the government reported better than expected gross domestic product growth for the second quarter of the year, according to Cathay Financial Holding Co.
Cathay Financial, one of the leading financial firms in Taiwan, said sentiment toward the local economy also reflected the improving outlook for the local job market and consumption.
Citing a survey, Cathay Financial said 17.2 percent of respondents said the economy had improved from six months earlier, while 46.8 percent said the economy was worse.
That translated into an economic optimism index figure for the economy of minus 29.7 in August, up from minus 32.4 in a similar poll conducted in July, ending five straight months of decline.
The economic optimism index for economic conditions over the next six months also rose in August, reversing a five month slide. After falling to minus 32.7 in July, it rose to minus 31.5 in August.
The slightly improved sentiment on the local economy came after the Directorate General of Budget, Accounting and Statistics (DGBAS) reported in late July that GDP grew in the second quarter by 3.29 percent from a year earlier, beating its earlier forecast of 3.08 percent in May.
The Cathay Financial survey was conducted from Aug. 1-7. After the poll was completed, the DGBAS revised second quarter GDP growth upwards to 3.30 percent in mid-August.
The improved outlook toward the economy was also reflected in the local job market. The optimism index for the labor market for the next six months edged higher from minus 36.9, in July to minus 36.4 in August, Cathay Financial said.
However, the optimism index for the labor market right now fell from minus 32.8 in July to minus 34.2 in August, the financial firm said.
The survey found the index gauging the willingness of consumers to spend on big ticket items rose from minus 8.5 in July to minus 5.9 in August, while the index on the willingness to purchase durable goods also grew from minus 25.0 in July to minus 24.3 in August.
Cathay Financial said that as long as people are more willing to spend on big ticket items and durable goods, Taiwan's private consumption growth momentum is expected to continue for the rest of the year.
Meanwhile, the optimism index toward the local stock market rose from minus 26.6 in June to minus 22.4 in July, while the index gauging investors' appetite to take risks rose from minus 12.5 to minus 9.2, Cathay Financial said.
Cathay Financial added that rising optimism over the equity market is based on higher corporate earnings and the continued recovery of the global market, which offset the impact of trade friction between the United States and China.
Cathay Financial said the average GDP growth for 2018 expected in the August survey was 2.3 percent, unchanged from a month earlier, indicating investors appear more cautious than the government, which has forecast growth of 2.69 percent.
The Cathay Financial survey collected 16,243 valid online questionnaires from clients of Cathay Life Insurance and Cathay United Bank, which are 100 percent owned by Cathay Financial.
Source: Focus Taiwan News Channel