Confidence in the local economy improved in August as worries over COVID-19 infections eased to some extent, while faith in the local stock market also strengthened after a strong share price rebound, according to Cathay Financial Holding Co.
Citing a survey, conducted during Aug. 1-8, Cathay Financial, one of the leading financial holding firms in Taiwan, said 25.2 percent of the respondents thought the economy improved in the month, while 49.3 percent of them said the economy worsened.
The figures translate into an economic optimism index for the current conditions of minus 24.1 in August, up from minus 36.2 in July, the financial holding firm said.
Sentiment toward the economic outlook also improved with the economic optimism index over the next six months rising to minus 43.8 in August from minus 60.7 in July, according to Cathay Financial.
In August, with a rebound in the Taiex, the weighted index on the Taiwan Stock Exchange, the optimism index toward the local equity market over the next six months rose sharply to minus 13.6, from minus 30.5 in July, after share prices bounced back, the survey found.
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The index assessing investors’ appetite to take risks also moved higher to minus 5.5 in August from minus 14.3 in July.
As of the end of July, the Taiex had soared 1,049.45 points or 7.52 percent after the National Stabilization Fund was authorized on July 12 to intervene to assuage the impact resulting from market uncertainties, including a rate hike cycle worldwide.
The NT$500 billion (US$16.56 billion) stabilization fund was set up in 2000 by the government to serve as a buffer against unexpected external factors that might disrupt the local bourse.
With improving sentiment toward the economy, the index assessing willingness to buy big-ticket items improved to minus 1.4 in August from minus 6.9 in July.
However, the index gauging plans to buy homes fell from minus 57.9 in July to minus 58 in August, a new low in more than five years, while the index assessing the willingness to sell homes recovered to minus 12.6 from minus 17.4, stopping a four-month falling streak, the survey found.
Respondents in the August survey pegged Taiwan’s 2022 economic growth at 2.76 percent, up from 2.68 percent in a similar survey in July, with 73 percent saying they expected annual growth to top 2 percent.
In the August survey, respondents expected growth in the local consumer price index (CPI) to reach 3.02 percent in 2022, slightly down from 3.03 percent in the July poll, while about 58 percent expected the CPI to exceed 3 percent.
The survey collected 20,127 valid online questionnaires from clients of Cathay Life Insurance and Cathay United Bank, which are wholly owned by Cathay Financial.
Source: Focus Taiwan News Channel