Taiwan’s consumer confidence rebounded this month as expectations for economic growth and spending improved, even as households continued to expect inflation to run above the government’s forecast, a survey released yesterday by Cathay Financial Holding Co (國泰金控) showed.
The survey of 14,187 people online found that the economic optimism index rose to 14.8 from 3.1 a month earlier, while the outlook index climbed to 16.5 from 8.
The improvement comes as Taiwan’s economy maintains solid growth momentum, with the government’s business climate monitor continuing to signal strong expansion, while leading and coincident indicators rose further, Cathay Financial said.
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Households have become more optimistic about economic growth, with 52 percent of respondents expecting Taiwan’s economy to expand by more than 11 percent this year, broadly in line with the government’s forecast of 11.05 percent. On average, respondents expect GDP to grow 10.89 percent this year, the survey showed.
The stronger outlook helped lift interest in big-ticket purchases, while easing the decline in spending on durable goods, with the index for big-ticket purchases rising to 18.3 from 15.3 and the index for durable goods increasing to minus-3.9 from minus-6.0.
The improved economic outlook was reflected in greater risk appetite, as 62.6 percent of respondents expect the TAIEX to rise over the next six months, outnumbering the 13.6 percent who expect a correction.
Against this backdrop, 42.7 percent said they planned to increase their investment positions, while 47.5 percent intended to hold steady and 9.8 percent planned to reduce their holdings, the survey showed.
Cathay Financial attributed the stronger sentiment to continued earnings strength in the technology sector and sustained investment in artificial intelligence (AI).
Although US-Iran negotiations remained stalled, US inflation had not accelerated sharply, it said.
At the same time, major US cloud service providers continued to raise their capital-spending plans, while their better-than-expected earnings reinforced expectations for sustained AI investment, supporting Taiwanese companies across the AI supply chain, Cathay Financial said.
Still, inflation remains a concern for households, the survey found. About 79 percent of respondents expect inflation to exceed 2 percent in a year, including 35 percent who see it rising above 3 percent, the survey found. Only 15 percent expect inflation to remain between 1 percent and 2 percent, the central bank’s target range.
Meanwhile, 61.3 percent of respondents said it was unwise to buy property, and 57.4 percent said it was a bad time to sell. Only about 23 percent viewed it as a good time to enter the market, pointing to continued weakness in housing-market sentiment, the survey showed.
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