Confidence in local economy weakens in October

Taipei, October 22 (CNA) Investor confidence in the local economy weakened in October as domestically transmitted COVID-19 cases continued to rise, according to Cathay Financial Holding Co.

In addition to the pandemic, investor sentiment has also been eroded by interest rate hikes around the world, as well as a drop in key indicators issued by the National Development Council (NDC), indicating a downward trend for the 10th consecutive month in August. , Cathay Financial said. The NDC is scheduled to release data for October next week.

Citing its survey conducted October 1-7, Cathay Financial, one of Taiwan’s leading financial holding companies, noted that 20.6% of respondents believed the local economy would improve in the next six months, while 57.8% said the economy would deteriorate.

The numbers translate to an index of economic optimism for the next six months of -37.2 in October, a more pessimistic outlook than the -30.1 recorded in September.

Also Read :  5 Ways Businesses Can Manage Cash Flow Challenges in a Stressed Economy

Economic optimism about current economic conditions also dropped from -43.2 a month earlier to -54.1 in October, according to the survey.

Amid more pessimistic sentiment, the indicator that assesses interest in selling homes fell from minus 12.8 in September to minus 13.4 in October, while the index that assesses willingness to buy a home fell from minus 55.8 to minus 55.8. minus 59.5, the lowest in six years.

Cathay Financial said the local central bank’s continued hike in interest rates to fight inflation is hurting sentiment in the housing market, making home buyers and sellers more cautious. Since March, the central bank has raised its key interest rates by 50 basis points, including a 12.5 basis point hike at the end of September.

Rising interest rates also hurt people’s willingness to buy big-ticket items such as cars, with the index falling from -3.3 in September to -4.7 in October, the survey showed.

Also Read :  Video: How to intelligently fuel your body for the rim-to-rim hike at Grand Canyon

Cathay Financial said global stock price volatility in the wake of aggressive rate hikes by the world’s leading central banks, in particular the hawkish Federal Reserve, dampened equity investor sentiment, with the stock market optimism index falling from -18.8 in September to -33.8. in October, the lowest in more than two years.

In addition, the index that assesses appetite for risk-taking in the stock market also dropped from -1.4 to -10.7, Cathay Financial said.

In the October survey, 61.8% of respondents expected their paychecks to remain unchanged over the next six months, up 0.1 percentage point from September, while 20.3% expected their paychecks to shrink over the next six months, up 1 percentage point. .5 percentage point compared to September.

Respondents to the October survey estimated Taiwan’s 2022 economic growth at 2.65%, down from 2.74% in a similar survey in September, with 70% saying they expected annual growth of more than 2%.

Also Read :  Editorial | The conflict in Ukraine will create lasting problems for Europe’s economy

This was more cautious than the General Directorate of Budget, Accounting and Statistics (DGBAS), which predicted in late August that Taiwan’s economy will grow by 3.76% in 2022.

In the October survey, respondents expected the local consumer price index (CPI) growth to reach 3.07% in 2022, unchanged from the September survey, while around 66% expected the CPI to exceed 3%. .

The DGBAS predicted inflation of 2.92% for 2022, above the 2% warning set by the central bank.

The survey collected 19,183 valid online questionnaires from customers of Cathay Life Insurance and Cathay United Bank, which are wholly owned by Cathay Financial.

(By Su Ssu-yun and Frances Huang)

Enditem/AW

Source

Leave a Reply

Your email address will not be published.