Taiwanese this month shed confidence about the nation’s economic outlook, but expressed greater willingness to invest in stocks as financial markets at home and abroad rally to record highs amid a boom in artificial intelligence (AI), a Cathay Financial Holding Co (國泰金控) survey showed yesterday.
Thirty-eight percent of respondents believed the economy would improve in the next six months, 28.6 percent said it would deteriorate and 19.4 percent expected it to hold steady, the survey found.
Sentiment was weaker compared with a month earlier, as GDP growth is expected to be 2.6 percent this year, lower than a government forecast in November last year of 3.35 percent.
Photo: CNA
The Directorate-General of Budget, Accounting and Statistics (DGBAS) is to renew its GDP projection next week.
The sentiment decline likely has to do with expectations by 55 percent of respondents that the consumer price index would climb above 2 percent this year, although the DGBAS has predicted it would slow to 1.64 percent, the survey showed.
The government has indicated plans to increase electricity rates across the board next month to reflect rising fuel prices and to mitigate losses by Taiwan Power Co (台電).
Electricity price increases would boost inflation.
The survey showed that 28.6 percent expect job hunting to become more difficult, while 22.4 percent said it would become easier.
Respondents were positive about the local exchange, with 42.7 percent expecting the TAIEX to rally in the next six months, while 22.8 percent expected a downturn and 20.6 percent had a neutral view, it said.
The TAIEX has benefited from global fund inflows seeking to take advantage of a recovery in technology products.
Leading tech firms released strong earnings results for last quarter and are upbeat about business prospects, citing fast-growing AI applications.
Taiwan is home to the world’s major suppliers of AI severs, high-performance computing chips and graphics cards.
The survey showed that 35.3 percent of respondents expect to increase their holdings of local shares, while 14.2 percent would cut positions and 50.5 percent would maintain their current level of investment.
Regarding large-item purchases, 34.5 percent would increase their budget for such items while 20.7 percent would tighten on such consumption, the survey showed.
Thirty-point-six percent intend to travel overseas more than usual this year, 11 percent aim to cut the frequency and 23.8 percent would keep their travel rates unchanged, it showed.
The results indicate that Taiwan faces a tourism deficit, with domestic hospitality providers facing pressure unless tourism arrivals increase.
Many respondents called on president-elect William Lai (賴清德) to give top priority to lowering home prices, improving wages and stabilizing consumer prices.
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