Economic sentiment hits highest level in more than 2 years

92
In this Nov. 3, 2017, file photo, shoppers discover the newest Apple X at Taipei 101 Apple Store. According to a November survey released by Cathay Financial Holding Co., positive sentiment about the local economy reached its highest point in more than two years after a recent slew of economic data pointed to improved performance. (CNA)

TAIPEI (CNA) – Positive sentiment about the local economy reached its highest point in more than two years after a recent slew of economic data pointed to improved performance, a November survey released by Cathay Financial Holding Co. (國泰金) showed Monday.

The upbeat outlook over local economic fundamentals came after Taiwan’s economy grew 3.11 percent year-on-year in the third quarter of 2017, beating an earlier government estimate of 1.89 percent on the back of a stronger export performance, said Cathay Financial.

In addition, the composite monitoring indicator compiled by the National Development Council not only flashed a green light for September but also reached 30, the highest since April 2011, the financial holding firm said.

The November survey found 31.3 percent of respondents said the local economy is doing better now than six months ago, while 28.6 percent said the economy is doing worse.

The figures translated into about 2.8 for the November economic optimism index “on current conditions,” marking the first time the index has been in positive territory since May 2015, when it stood at 23.

Meanwhile, the survey showed the November economic optimism index “for the next six months” rose from minus 5.9 in October to zero, the first time the index has climbed out of negative territory since May 2015, when it stood at 14.4, Cathay Financial said.

With the improvement in economic sentiment, Cathay Financial said, local investors appeared more willing to make purchases, as the index that measures willingness to buy big-ticket items hit its highest point in more than two years.

The index on “willingness to buy big-ticket items” rose from 4.0 in October to 5.5 in November, the highest since July 2015, when the figure stood at 7.2, Cathay Financial said.

Meanwhile, the optimism index on “the equity market over the next six months” also rose from minus 17.2 in October to minus 7.7 in November, while the index gauging the appetite to take risks also rose from minus 4.8 to minus 2.0, the survey showed.

Cathay Financial said 61.9 percent of respondents in the survey agreed that the local economy will grow more than 2 percent in 2018 with an expected economic growth rate of 2.08 percent. Although that is less than the government forecast of 2.77 percent, it is higher than the expected 1.57 percent growth for 2017.

According to the survey, Taiwan’s consumer price index is expected to rise 1.11 percent in 2018, higher than an earlier government estimate of 0.87 percent.

The survey, conducted from Nov. 1-7, collected 18,866 valid questionnaires online from clients of Cathay Life Insurance (國泰人壽) and Cathay United Bank (國泰世華), which are 100 percent owned by Cathay Financial.

By Tien Yu-pin and Frances Huang