Consumer confidence improved this month, signaling a tentative return of optimism across economic expectations, equity market sentiment and spending intentions, even as concerns about slowing growth and lingering inflation persist, a survey released yesterday by Cathay Financial Holding Co (國泰金控) showed.
The proportion of respondents expecting the domestic economy to grow over the next six months rose to 19.3 percent, up from the previous month, following the National Development Council’s latest business signal flashing “yellow-red” — typically interpreted as a sign of expansion, the survey said.
However, uncertainty remains high. More than half of the survey’s 12,718 respondents — polled online from June 1 to June 7 — said that they believe conditions could deteriorate amid continued global volatility, including US tariff adjustments and geopolitical risks.
Photo: CNA
Despite the cautious tone, appetite for consumer spending improved. Interest in purchasing big-ticket items nudged higher and plans to acquire durable goods ticked up, it said.
Nonetheless, a greater proportion of consumers still intend to reduce their budget, highlighting a prevailing conservative stance.
Sentiment remained muted on housing. A growing number of people indicated plans to sell property rather than buy, it said, as expectations for a market rebound remain low.
The central bank has shown no intention of loosening mortgage restrictions, even as the number of transactions falls.
The central bank on Thursday said it would refrain from additional tightening, adding that earlier rounds of credit controls had already tempered lending and cooled price expectations.
Overall, households remain guarded, despite the Directorate-General of Budget, Accounting and Statistics forecasting GDP growth of 3.1 percent and inflation of 1.88 percent for this year.
Notably, 63 percent of respondents expect growth to fall below 3 percent, while 68 percent anticipate inflation exceeding 2.3 percent, underscoring persistent anxiety over rising living costs, the survey found.
Stock market sentiment brightened slightly, buoyed by a temporary easing in US-China trade tensions. About 25 percent of respondents said they plan to increase their equity holdings, compared with 23.5 percent who intend to sell.
Additionally, 31.5 percent believe the TAIEX would rise over the next six months, while 37 percent anticipated a decline — the most upbeat sentiment reading this year, it said.
Exchange-traded funds continue to be a cornerstone of investment strategies, the survey showed. Nearly half of respondents plan to maintain their current holdings for another 12 months, while 42 percent expect to increase their exposure. Only 10 percent expressed intentions to reduce positions that have lost value due to the sharp appreciation of the New Taiwan dollar against the US dollar, and other adverse market movements, it said.
Looking ahead, US trade policy remains a key variable. About half of respondents cited US President Donald Trump’s tariffs and tax policies as the most important factor influencing bond prices, they survey showed.
Other key drivers include macroeconomic indicators from both Taiwan and the US, US Federal Reserve policy decisions and exchange rate fluctuations, it showed.
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