Public confidence in the economy and equity investment showed signs of stabilization this month, ending five straight months of declines, after the government last week raised its GDP growth forecast for this year, a survey released yesterday by Cathay Financial Holding Co (國泰金控) showed.
More people expect the economy to continue to expand from last month, despite a trade war between the US and China, the nation’s largest financial services provider said.
People who expect the economy to deteriorate in the coming six months fell slightly to 48 percent, while 16.5 percent expect an improvement, the monthly survey found.
Thirty percent said the economy would remain unchanged, while 4.9 percent expressed no opinion, according to the online survey, which polled 16,243 respondents between Aug. 1 and Aug. 7.
“Last quarter, the economy grew at the fastest pace in more than three years thanks to strong exports that allowed the government to revise up its GDP growth forecast for this year to 2.69 percent,” Cathay Financial economic research department assistant manager Achilles Chen (陳欽奇) said in a report.
The arrival of the high sales season for technology brands would boost local firms in their supply chains, Chen said.
Taiwan is home to scores of suppliers for Apple Inc, which is expected to unveil its new iPhone models next month.
However, the trade war cast a shadow over public confidence, with 74.8 percent expecting downside risks to build up, while nearly 64 percent expressed worry and 30 percent rated the unease as “serious,” the poll found.
The sentiment could limit appetite for risky assets.
The poll found that 27.8 percent of respondents intend to cut equity investments, while 18.6 percent plan to increase holdings.
The findings make sense, as 40.7 percent believe the TAIEX would enter corrections in the next six months, while 18.3 percent are looking at upward movements, the survey said.
More than one-third of respondents expressed plans to lower their budgets for durable goods or big-ticket items in the coming six months, far more than those who aim to increase spending, it said.
That explained why a majority of the respondents said it is a bad time to sell real estate, it said.
About 72 percent said it is not wise to buy, while 57.9 percent believe it is not a good idea to sell, either, the poll said.
Most of the respondents expect consumer prices to increase 3 to 6 percent in the coming six months, it said.
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