MOOD GAUGE:
Households stayed confident in AI-led growth and equities despite softer sentiment, price pressures and geopolitical strain, a Cathay survey showed
By Crystal Hsu / Staff reporter
Taiwanese consumers remained broadly optimistic about the economy and stock market this month, although confidence eased slightly amid renewed geopolitical tensions and persistent inflation concerns, a survey released yesterday by Cathay Financial Holding Co (國泰金控) showed.
The findings suggest households continue to view Taiwan’s artificial intelligence (AI)-driven economic expansion favorably despite recent financial market volatility and lingering uncertainty stemming from conflicts in the Middle East.
Cathay’s economic sentiment indicators softened from the previous month, as the index measuring current economic conditions fell to 25.8, while the six-month outlook gauge declined to 20.3. Both readings remained firmly in positive territory, indicating optimists continued to outnumber pessimists.
Photo: CNA
The resilience in sentiment reflects Taiwan’s strong economic momentum, the company said, citing the National Development Council’s (NDC) latest business monitoring indicator, which continued to flash “red,” signaling robust growth, while the council’s leading and coincident indicators continued to rise.
Against that backdrop, respondents remained confident about the economy’s prospects, the survey found, with nearly 59 percent expecting Taiwan’s economy to expand by more than 9 percent this year, broadly in line with the Directorate-General of Budget, Accounting and Statistics’ (DGBAS) May forecast of 9.64 percent growth.
Inflation, however, remained a concern, the survey found. Respondents expected consumer prices to rise 2.3 percent this year, exceeding the DGBAS forecast of 1.93 percent. About 68 percent anticipated inflation would remain above the central bank’s 2 percent target, reflecting concerns over higher energy costs and rising prices of AI-related components, the survey showed.
Consumers have also turned somewhat more cautious about spending, as the index tracking willingness to purchase big-ticket items slipped to 20.7, while the gauge measuring willingness to buy durable goods fell into negative territory, suggesting households were becoming more selective about major purchases, the survey showed.
Even so, sentiment toward equities remained upbeat and confidence in the stock market remained particularly strong, despite sharp swings in recent weeks as investors weighed expectations of tighter global monetary conditions against sustained demand for AI-related technology products, the survey showed.
About 57 percent of respondents expect the TAIEX to exceed 50,000 points in the second half of this year, and roughly 20 percent forecast a high of 52,000 to 54,000 points, while 10 percent expect a high of at least 54,000 points, it showed.
The survey was conducted from July 1 to July 7 and gathered responses from 14,008 members of Cathay Life Insurance Co’s (國泰人壽) official Web site and clients of Cathay United Bank Co (國泰世華銀行).