Public opinions on the nation’s economic outlook are dimming, a survey by Cathay Financial Holding Co (國泰金控) showed yesterday, following the government’s seventh cut in its GDP growth rate estimate for this year. The government now estimates GDP growth will reach only 2.08 percent, while inflationary readings rose to a four-year high.
The majority of respondents, or 51 percent, expect the economy to deteriorate in the next six months, while only 18 percent held an optimistic view, the survey found.
The Directorate-General of Budget, Accounting and Statistics is due to unveil its latest forecast of major economic data tomorrow, after a report on July 31 showed GDP contracted 0.16 percent in the second quarter.
Adding to the weaker sentiment, 75 percent of respondents said they expect consumer prices to rise by 3 percent to 6 percent from their current levels in the next six months, the survey indicated.
Meanwhile, 55 percent expressed concern that the job market may toughen in the next six months, while 31 percent believe the “status quo” will be maintained, the survey found.
Expectations of higher inflationary pressures led 24 percent of respondents to say that their income may drop in the coming six months, while 65 percent expect their income to remain unchanged.
The grayish outlook dampened respondents’ appetite for risky assets and the purchase of durable goods.
About 47 percent of respondents suggested that they plan to cut spending on durable goods, compared with 13.4 percent who intend to increase their budget for those items, the survey indicated.
Another 38 percent said they would slash big-item consumption, while 17 percent intend to allocate more funds for that, according to the survey.
A total of 37 percent said they would reduce funding for equity investments, compared with 15 percent who would invest more.
While 67 percent of respondents said the registration requirement for housing transactions has had no impact on their decisions, 47 percent said they have no plans to buy a home in the coming year, the survey showed.
The finding bodes ill for the housing market that saw transactions recover somewhat in the first half of the year, the survey said.
Most respondents, or 71 percent, believe it is not wise to buy a house now, while 54 percent share the view on selling one, the survey found.