Public confidence in Taiwan’s economic outlook, consumption and stock market has improved so far this month, as optimism about artificial intelligence (AI) lifted investor risk appetite, a survey by Cathay Financial Holding Co (國泰金控) showed yesterday.
The survey, which polled more than 13,000 customers online from March 1 to 7, found that Taiwanese generally have bullish sentiment toward local equities, supported by a continued AI boom and anticipation that US chipmaker Nvidia Corp would deliver sanguine guidance during an annual technology event.
The TAIEX rose about 10 percent last month, helping lift investor confidence, the survey said.
Photo: CNA
As a result, the public’s optimism reading for local shares rebounded to 35.3, while the risk appetite index climbed to 31.7 — relatively high levels since the launch of the survey.
Confidence in the broader economic outlook also picked up, helped by the government’s business climate monitor that in January remained in the “red” zone, indicating an economic boom, with the leading and coincident indicators gaining traction, it said.
The public’s optimism index for the economic climate rose to 18.2, while the outlook index rose to 5.1.
Consumer sentiment also strengthened. The survey showed the index measuring willingness to make big-ticket purchases rose to 16, while interest in durable goods consumption ticked up, though it remained in contraction territory.
The survey also asked respondents about their expectations for Taiwan’s economic growth and inflation this year.
The Directorate-General of Budget, Accounting and Statistics on Feb. 13 forecast that the economy would expand 7.71 percent this year, driven by strong exports, while the consumer price index (CPI) is projected to increase a mild 1.68 percent.
However, Taiwanese appear slightly more cautious about economic growth and more concerned about inflation.
The survey showed the public’s expectation for GDP growth averaged 6.54 percent, with 59 percent expecting it to top 6 percent.
Meanwhile, the public’s expectation for CPI growth averaged 2.16 percent, with 51 percent expecting inflation to exceed 2 percent, suggesting concerns over inflation linger despite the government’s benign projections.
Looking 12 months ahead, 63 percent expect inflation to exceed 2 percent, the central bank’s warning level. About 28 percent see inflation rising above 3 percent, while 31 percent expect inflation to range between 1 percent and 2 percent. Only 7 percent believe it would fall below 1 percent.
When asked about the main drivers of price changes over the coming year, 28 percent cited consumer goods prices, while another 28 percent pointed to imported raw material costs. About 21 percent said the broader economic outlook would be the key catalyst influencing inflation.
Inflation worries are likely to intensify as crude oil prices surge and supply tightens amid escalating tensions in the Middle East.
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