Public confidence in the nation’s economy and equity investments improved this month from last month in light of reduced economic uncertainty after the US and China’s trade tensions eased, a Cathay Financial Holding Co (國泰金控) survey found.
The poll, released yesterday, found that 35.8 percent of the 16,878 Cathay Financial customers polled expect Taiwan’s economy to pick up in the next six months, compared with the 28.7 percent who felt so last month.
About 25.8 percent said they thought the economy would deteriorate, down from 33.5 percent in last month’s survey.
The online poll was conducted in the first week of this month.
A total of 83 percent of respondents predicted economic growth would remain above 2 percent this year, up from 79 percent last month, with 35.7 percent saying they expect growth to be 2.6 percent to 2.8 percent, compared with the 25.5 percent who said so last month.
The average annual GDP growth forecast rose slightly, from 2.3 percent last month to 2.4 percent, the survey found.
“Consumers’ predictions do not always come true, but the new poll indicates that the public has become more upbeat about the economy this year, similar to the Directorate-General of Budget, Accounting and Statistics,” Cathay Financial economic research division manager Nelson Chen (陳志祿) said by telephone.
Chen attributed the positive sentiment to the phase one trade deal that the US and China signed on Wednesday last week, in which the US agreed to cut the 15 percent tariff rate it imposed on Sept. 1 last year on US$120 billion of Chinese goods to 7.5 percent and suspended the tariffs due to take effect on Dec. 15.
“Although the phase one deal only solved part of the disputes between the two nations and left unchanged the tariffs of 25 percent imposed by the US on US$250 billion of Chinese goods, it eased people’s anxiety, as the US is not likely to add new tariffs later this year unless China does not honor the deal,” Chen said.
The two nations are expected to continue negotiations over their trade dispute, but may not sign a deal before the US presidential election in November, which would leave investors a stabilized situation till then, Chen said.
The hopeful sentiment also led to investors’ preferring higher risk in investment, with 25.6 percent of respondents saying that they would increase their equity investments instead of holding onto cash, up from 22.5 percent a month earlier, the survey showed.
While many analysts forecast the TAIEX will break records this year, 40.2 percent of respondents believe it would slowly advance and stay below 12,500 points in the first half of this year, the survey found.
The TAIEX record of 12,682 points, set in 1990, still stands.
“It seems that the public is optimistic, but also cautious,” Chen said.
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