Confidence in economy weakens: survey

Public confidence in the local economy over the next six months has weakened even though the government has forecast that Taiwan’s gross domestic product (GDP) for 2017 will pick up on the back of rising global demand, according to Cathay Financial Holding Co. (國泰金).

Citing a survey conducted earlier this month, Cathay Financial, one of Taiwan’s leading financial holding firms, said that 44.2 of the respondents in the poll agreed that the local economy will get worse over the next six months, while only 20.9 percent agreed that the economic fundamentals over the next six months will fare better.

The results translate into a December optimism index toward the economy over the next six months of minus 23.2, down from minus 22.1 recorded in November, Cathay Financial said.

Cathay Financial said that while economic fundamentals are expected to improve for 2017 after Taiwan’s outbound sales have shown signs of staging a rebound, many people prefer to hold a cautious attitude about the outlook.

The economic optimism index for the current economic situation in the December survey also fell to minus 27.8 from November’s minus 27.3, which represents further evidence of caution, Cathay Financial said.

The survey yielded very cautious results, even though a government forecast made in late November indicated that GDP will grow 1.87 percent in 2017, up from an estimated 1.35 percent rise for 2016.

Despite the weakness of the optimism index over the next six months compared with November, Cathay Financial said, sentiment toward the local job market improved slightly, with 10.4 percent of the respondents appearing upbeat about local employment, up from 9.2 percent recorded in November.

The latest survey shows that 16.7 percent of the respondents think that their wages will increase over the next six months, compared with 15.2 percent registered in the November poll.

According to the survey, 16.1 percent said they are willing to take risks in the financial market by parking their funds in the local equity market, compared with 15.2 percent seen in the previous poll.

The survey indicated that 23.8 percent of the respondents said they are willing to spend more on big-ticket item purchases over the next six months, compared with 24.0 percent in the November survey.

The survey, conducted Dec. 1-7, collected 17,262 questionnaires online from clients of Cathay Life Insurance (國泰人壽) and Cathay United Bank (國泰世華), which are 100 percent owned by Cathay Financial.

Source: Focus Taiwan News Channel

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