Fri, Sep 21, 2018 - Page 12 News List

Survey shows public confidence in economy is rising

By Kao Shih-ching  /  Staff reporter

Consumers have more confidence in economic growth and the stock market, and expect inflation to rise moderately, a survey published yesterday by Cathay Financial Holdings (國泰金控) showed.

The improvement is supported by an upward adjustment of the Directorate-General of Budget, Accounting and Statistics’ GDP growth forecast, the report said.

The agency raised its GDP growth forecast to 2.69 percent for the full year, after reporting 3.3 percent growth in the second quarter, it said.

Four labor market indicators — employment, employment outlook, salary and salary expectations — all rebounded, showing that the public has confidence in the labor market, it said.

Consumer optimism should translate into spending on durable goods and big-ticket items, it said.

However, more respondents said they felt the pinch of rising inflation and that they expected the situation to last through the second half of the year, after consumer prices rose for a second consecutive month.

More than half of the respondents expected consumer prices to rise by more than 1.5 percent this year, the survey found.

Meanwhile, 38.7 percent of respondents said they expected prices of daily necessities to increase by 3 to 6 percent in the coming half year, the survey showed.

If inflation continues to rise, pressure on the central bank to raise key interest rates will increase, Cathay said.

However, considering the nation’s economy and its neutral stance on real interest rates, the central bank is unlikely to tighten its monetary policy during the quarterly meeting scheduled for Thursday next week, the firm said.

With average inflation of 1.64 percent from January to last month, 16.5 percent of respondents said they expected the government to take counterinflationary measures, the survey showed.

Thirty-two percent of respondent said they hoped that the government would encourage local enterprises to raise their wages, it showed.

The survey was conducted from Sept. 1 to Sept. 7 by e-mail questionnaire among users of Cathay Life’s Web site and Cathay United Bank clients, and collected 15,846 valid responses.

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