Taipei, Confidence in local economic fundamentals weakened further in April as the COVID-19 coronavirus pandemic escalates, according to Cathay Financial Holding Co.
The silver lining, however, is that the magnitude of the decline in economic faith was capped as the government unveiled a massive stimulus package, including preferential loans to financially troubled enterprises and relief cash payments to needy individuals, Cathay Financial said.
Citing a survey conducted April 1-7, Cathay Financial said that 87 percent of the respondents thought the local economy was doing worse than six months earlier, while 4.9 percent thought it had improved.
This translates into an optimism index for the current economic condition of minus 82.1 in April, down from minus 57.8 in March, according to the survey results.
The economic optimism index for the next six months also dropped from minus 47.9 in March to minus 51.4 in April, the survey indicated.
However, the drops in April were narrowed to 24.3 and 3.5, respectively, in the two categories, from 39.5 and 20 in March, according to the survey results.
In addition, the optimism index for the local stock market moved higher to minus 35 in April from minus 41.2 in March, as equity prices bounced back in line with their counterparts in the U.S. and European markets as many economies launched monetary and fiscal stimulus measures to combat the impact of the virus, Cathay Financial said.
Nevertheless, the index gauging the outlook for wage hikes fell from minus 12.1 in March to minus 25.3 in April, the lowest level in 78 months, while the index gauging the willingness of purchases of big- ticket items such as cars and homes, also fell to minus 40.8 from minus 27.1, Cathay Financial said, adding that many remained cautious about the economy.
The respondents pegged Taiwan’s 2020 economic growth at 2.1 percent, down 0.1 percentage points from a similar survey in March, with 50 percent of the respondents saying they expect the growth to top 2 percent for the year, down from 68 percent in the March poll.
The survey collected 17,393 valid online questionnaires from clients of Cathay Life Insurance and Cathay United Bank, which are 100 percent owned by Cathay Financial.
Source: Focus Taiwan News Channel