Taipei, Local confidence in Taiwan's economy improved in April for the third consecutive month on expectations that a deal would be struck soon between the United States and China to resolve their trade disputes, according to Cathay Financial Holding Co..
In a survey of its clients in early April, Cathay Financial found that 24.2 percent think the domestic economy will improve over the next six months, while 32.7 percent expect it to weaken.
The data translated into an economic optimism index for the next six months of minus 6.6 in April, up from minus 7.1 in a similar poll conducted in March, Cathay Financial said.
The optimism index for the current economic conditions, meanwhile, changed little from March at minus 10.4, Cathay Financial said.
Cathay Financial, one of the leading financial holding companies in Taiwan, said the improved sentiment also reflected more stable economic growth in China. In the first quarter, China's GDP grew 6.4 percent from a year earlier, topping a market estimate of 6.3 percent.
In Taiwan, such positive external factors have offset the effects of the unsatisfactory domestic economic data such as the purchasing managers' index (PMI), which remained below the 50 threshold, in contraction mode, for the fifth consecutive month in March, Cathay Financial said.
Citing its survey, the company said the local optimism index for the stock market improved from minus 12.7 in March to minus 10.7 in April, but the index gauging investors' willingness to take risks fell from minus 3.6 to minus 4.1.
The optimism index for the stock market was the highest in 17 months after the market's recent gains, while the drop in the index for investors' risk taking appetite showed caution about a possible major pullback on the market, Cathay Financial said.
Meanwhile, the optimism index for employment over the next six months fell to minus 26.8 in April from minus 25.7 in March, the survey found.
The optimism index for the current labor market also dropped, from minus 24.8 in March to minus 26.5 in April, according to the survey.
Cathay Financial said respondents pegged Taiwan's 2019 gross domestic product (GDP) growth at 2.2 percent on average, unchanged from a similar survey in February.
That was close to the projections in February by the Directorate General of Budget, Accounting and Statistics, which cut its forecast for Taiwan's 2019 GDP growth from 2.41 percent to 2.27 percent, citing weakening global demand.
The survey, conducted April 1-7, collected 14,471 valid online questionnaires completed by clients of Cathay Life Insurance and Cathay United Bank, two entities that are 100 percent owned by Cathay Financial.
Source: Focus Taiwan News Channel