Public sentiment about the nation’s economic outlook and purchases of big-ticket items turned conservative this month, as US President Donald Trump’s tariff threats sap confidence, a survey by Cathay Financial Holding Co (國泰金控) showed.
The survey showed that 44.5 percent of respondents expect the economy to deteriorate in the coming six months, far outnumbering the 23.3 percent who believe things would brighten up and 20.9 percent who hold a neutral view.
The sentiment decline came as the local bourse and property market entered corrections, amid heightening global trade and geopolitical tensions, said the online survey, which was conducted from March 1 to 7.
Photo: CNA
A majority, or 56 percent, expect the economy to expand by less than 3 percent this year.
The Directorate-General of Budget, Accounting and Statistics last month forecast that the economy would rise 3.14 percent, while the central bank on Thursday trimmed its growth forecast from 3.15 percent to 3.05 percent.
People are also expecting further consumer price hikes and unfavorable shifts in the job market, the survey said.
An overwhelming 83 percent predict that consumer goods would become more expensive six months ahead, compared with a tiny 1.3 percent who believe that prices would go down and 14 percent who expect prices to maintain a steady trajectory.
Taiwan Power Co (台電), Taiwan Water Corp (台水) and Taiwan Railway Corp (台鐵) have all announced plans to increase fees to keep their operations viable, fueling inflationary expectations.
A majority, or 51 percent, believe the consumer price index (CPI) would grow faster than 2 percent this year and 15 percent expect it to advance by more than 3 percent, it said.
Furthermore, 33.5 percent think it would become more difficult to find jobs, compared with 16.2 percent who believe it would become easier.
The conservative outlook would drive consumers to tighten their budget, it said.
That explained why 31.2 percent said they plan to cut spending on durable goods while 20.1 percent said they would increase their budget, the survey found.
Meanwhile, 29.8 percent would spend more money on big-ticket items and 22.8 percent would trim the budget, also reflecting a confidence retreat from one month earlier, it said.
Still, more than 45 percent said they would stick to their original plans, the survey found.
People voiced mixed views about the TAIEX’s performance and a considerable number showed an interest in raising their stakes, it said, as 33.6 percent bet on a stock rally and 34.2 percent expect further corrections.
While 51.2 percent would hold their portfolio intact, 32 percent plan to channel more cash into stockholdings and 16.8 percent would reduce their positions, it said.
Taiwan’s retail investors have lent support to the local bourse while foreign institutional players cut holdings, as evidenced by the fast-growing popularity of exchange-traded funds (ETFs).
A number of survey show that more people are investing in ETFs to accumulate wealth to support life after retirement.
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