Confidence in local economy mixed amid rise in COVID-19 cases: Poll

Taipei, Sept. 24 (CNA) Investors appeared mixed about the local economy at a time when the number of COVID-19 infections has risen sharply as the Omicron BA.5 variant takes hold, according to a Cathay Financial Holding Co. survey.

Cathay Financial, one of Taiwan’s leading financial holding companies, said 21.8 percent of the respondents in its latest monthly survey conducted Sept. 1-9 thought the local economy would get better over the next six months, while 51.9 percent of them said the opposite.

The figures translated to an economic optimism index over the next six months of minus 30.1 in September, a more pessimistic outlook than the minus 24.1 score in August.

But economic optimism over current economic conditions improved slightly to minus 43.2 in September, from minus 43.8 a month earlier, the survey found.

The generally pessimistic outlook was seen across the main indicators that make up the survey, even if some improvement was seen in a few of them.

The index gauging the willingness to buy big-ticket items, such as cars, fell to minus 3.3 in September from August’s minus 1.4, while the index assessing the likelihood respondents would purchase durable goods improved to minus 21.5, from minus 23.2 previously, the survey found.

The greatest pessimism was seen in the indicator on interest in buying a home over the next six months, which improved marginally to minus 55.8 in September, from minus 58 in August, ending five consecutive months of decline.

But the index assessing respondents’ willingness to sell their homes fell to minus 12.8, from minus 12.6 previously, the survey found.

According to the survey, the employment index over the next six months moved lower to minus 27.8 in September from August’s minus 26.8, while the index on confidence in the current job market improved to minus 29.6 from minus 31.7 previously.

Respondents were also less optimistic about the stock market over the next six months because of the volatility caused by interest rate hikes to combat inflation.

The optimism index toward the stock market fell to minus 18.8 in September, down from minus 13.6 in August.

But investors appeared somewhat more willing to take on risk, with the index reflecting respondents’ appetite for risk moving up to minus 1.4 in September, from minus 5.5 in August, according to the survey.

Respondents in the September survey pegged Taiwan’s 2022 economic growth at 2.74 percent, down from 2.76 percent in a similar survey in August, with 73 percent saying they expected annual growth to top 2 percent.

That was more cautious than the Directorate General of Budget, Accounting and Statistics (DGBAS), which forecast in late August that Taiwan’s economy would grow 3.76 percent in 2022.

In the September survey, respondents expected growth in the local consumer price index (CPI) to reach 3.07 percent in 2022, up from 3.02 percent in the August poll, while about 66 percent expected the CPI to exceed 3 percent.

The DGBAS has forecast 2.92 percent inflation for 2022, above the 2 percent alert set by the central bank.

The survey collected 17,281 valid online questionnaires from clients of Cathay Life Insurance and Cathay United Bank, which are wholly owned by Cathay Financial.

(By Su Ssu-yun and Frances Huang)

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