Confidence in local economy mixed amid rise in COVID-19 cases: Poll

Taipei, Sept. 24 (CNA) — According to a survey by Cathay Financial Holding Co., at a time when the number of COVID-19 infections has risen sharply, as the Omicron BA.5 variant takes hold, investors are showing Mixed in relation to the local economy.

Cathay Financial, one of Taiwan’s leading financial holding companies, said 21.8 percent of respondents in its latest monthly survey, conducted Sept. 1-9, thought the local economy would improve in the next six months, while 51.9 percent of them said the opposite.

The numbers translated to a six-month economic optimism index of minus 30.1 in September, a more bearish outlook than the minus 24.1 read in August.

But economic optimism about current economic conditions improved slightly to minus 43.2 in September from minus 43.8 a month earlier, according to the survey.

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The generally pessimistic outlook was evident across all the main indicators that make up the survey, although some of them showed some improvement.

The index measuring willingness to buy large items like cars fell to minus 3.3 in September from minus 1.4 in August, while the index measuring the likelihood that respondents would buy durable goods rose minus 21.5 improved from minus 23.2 previously, the survey found.

Most bearish was the Six Month Home Buying indicator, which edged up to -55.8 in September from minus 58 in August, ending five straight months of decline.

But the index, which assesses respondents’ willingness to sell their homes, fell to minus 12.8 from minus 12.6, according to the survey.

According to the survey, over the next six months the employment index fell to minus 27.8 in September from minus 26.8 in August, while the index of confidence in the current job market improved to minus 29.6 from minus 31.7.

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Respondents were also less optimistic about the stock market over the next six months as rate hikes to fight inflation led to volatility.

The stock market optimism index fell to -18.8 in September from -13.6 in August.

But investors appeared to be slightly more risk-averse, with the index, which reflects respondents’ risk appetite, rising to -1.4 in September from minus 5.5 in August, according to the survey.

Respondents in the September survey projected Taiwan’s economic growth at 2.74 percent in 2022, compared with 2.76 percent in a similar survey in August, with 73 percent saying they expect annual growth of over 2 percent.

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That was more cautious than the Directorate-General for Budget, Accounting and Statistics (DGBAS), which forecast in late August that Taiwan’s economy would grow 3.76 percent in 2022.

In the September survey, respondents expected the local consumer price index (CPI) to grow 3.07 percent in 2022, up from 3.02 percent in the August survey, while about 66 percent expected the CPI to exceed 3 percent .

The DGBAS has forecast inflation of 2.92 percent for 2022, above the 2 percent warning set by the central bank.

The survey collected 17,281 valid online questionnaires from customers of Cathay Life Insurance and Cathay United Bank, which are wholly owned by Cathay Financial.

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