Public confidence in economic growth remains soft, despite three consecutive months of improving sentiment in private consumption and employment prospects, a monthly survey by Cathay Financial Holding Co (國泰金控) showed yesterday.
The survey found that public confidence in economic growth and employment prospects this month rose to the highest level since July 2015.
The optimism was also reflected in an uptick in the sentiment toward spending on durable goods.
The sentiment is supported by six consecutive months of increasing exports and a record-high official manufacturing purchasing managers’ index (PMI) reading last month, Cathay Financial economic research department assistant manager Achilles Chen (陳欽奇) said.
The National Development Council’s business climate monitoring indicators have stood at “green” for eight consecutive months since July last year, signaling stable growth, Chen said.
The readings show that economic growth momentum remains intact amid a global recovery, with GDP expected to grow at least 2.1 percent this year, Chen said.
While 47 percent of respondents expect this year’s GDP growth to exceed last year’s, only 5.2 percent of respondents said the economy will expand beyond 2 percent, the survey showed.
The median GDP growth expectation in this month’s survey printed 1.4 percent, little changed from the previous month, the survey showed.
The reading falls in the lower limit of a separate GDP growth forecast by Cathay Financial last month that pegged this year’s growth at 2.1 percent, with an 80 percent likelihood for the figure to stand between 1.4 percent and 2.5 percent.
Respondents gave a median inflation forecast of 1.32 percent for this year, higher than the 1.08 percent forecast by the Directorate-General of Budget, Accounting and Statistics, the survey showed.
While respondents were upbeat about job prospects, expectations for pay hikes declined, the survey showed.
The survey found that 33.7 percent of respondents expect inflation to decline between 1 percent and 1.25 percent this year, while 30 percent are anticipating the figure to exceed 1.5 percent.
Meanwhile, despite lingering uncertainties about US economic and trade policies under the administration of US President Donald Trump, as well as upcoming elections in Europe, this month’s survey showed that risk appetites of local investors rose to its highest since 2015.
Rallies in the stock prices of Taiwanese suppliers to Apple Inc has pushed the TAIEX to its highest over the past 23 months amid high expectations for the US firm’s flagship smartphone launch later this year, Chen said.
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