Consumers’ economic mood and consumption attitude appeared slightly downbeat this month, and they were also cautious about next year’s inflation outlook, a survey released yesterday by Cathay Financial Holding Co (國泰金控) showed.
At the same time, people’s confidence in stock investment fell, and they were conservative about both pay raises and year-end bonuses, the survey of 13,154 respondents from Dec. 1 to 7 found.
While most domestic and foreign institutions have predicted Taiwan’s GDP to expand by more than 3 percent next year, Cathay Financial’s survey showed that respondents forecast an average growth of 2.56 percent for next year, with only 28 percent expecting the economy to grow by more than 3 percent.
Photo: CNA
“The public’s view on economic growth is relatively conservative,” Cathay Financial said in a statement.
The Directorate-General of Budget, Accounting and Statistics (DGBAS) last month forecast a 3.54 percent GDP growth for next year, while the central bank last week projected a 3.67 percent expansion in the economy.
As for inflation, respondents on average predicted a 2.17 percent increase in consumer prices next year, with 53 percent expecting price increases to surpass 2 percent, the monthly survey found.
That’s higher than the DGBAS’ 1.61 percent growth forecast and the central bank’s 1.63 percent estimate for the inflation rate. “People’s expectation for inflation is relatively higher,” Cathay Financial said in the statement.
In recent months, investors’ sentiment for local equities has rebounded notably from lows seen in early April following US President Donald Trump’s announcement of exorbitant tariffs on most of Washington’s major trading partners.
The TAIEX closed 1.64 percent higher at 28,149.54 yesterday, up 23.29 percent so far this year and up 61.86 percent from the April 9 low of 17,391.76 on easing tariff concerns, artificial intelligence (AI) hype and expectations of more US Federal Reserve interest rate cuts.
However, investors’ optimism in local equities and their risk appetite slid this month after the stock market consolidated and showed a range-bound trading recently, weighed down by growing concerns over the health of the AI industry, Cathay Financial said.
Even though Taiwan’s economic growth is projected to reach a 15-year high this year, people’s salary and year-end bonus expectations also showed a conservative mentality, according to the survey.
About 48 percent of respondents expected their regular wages to remain unchanged next year, while 46 percent believed wages would increase. But, only 8 percent expected an increase of more than 3 percent, the survey showed.
Meanwhile, 57 percent of respondents expected their year-end bonuses to be equivalent to one to three months’ salary and 29 percent predicted less than one month. Yet, 14 percent of respondents expected more than three months and 7 percent projected more than five months, it found.
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