Confidence in economy weakens further in May: poll

Taipei, Sentiment toward Taiwan's economy weakened in May after the composite index of monitoring indicators fell slightly at the end of March, a poll released by Cathay Financial Holding Co. said Monday.

Citing the results of the survey, Cathay Financial said about 19 percent of respondents said current economic conditions were better than they were from six months ago, while 45.6 percent said the economy was worse.

The result translated into an economic optimism index on the current economy of minus 26.7, down from minus 16.8 seen in a similar poll conducted in April. It was the third consecutive month that the index moved lower, Cathay Financial said.

In addition, the economic optimism index on the economic outlook over the next six months also fell to minus 27.8 in May, from April's minus 20.8, the survey found. The May index fell to its lowest level in 29 months, Cathay Financial said.

The weakening confidence seen in the latest survey, which was conducted from May 1 to 7, came after the National Development Council (NDC) reported in late April that the composite index of monitoring indicators for March fell 1 point from a month earlier to 23, though it still flashed a "green light," signaling steady growth.

The survey also found that the index on the outlook of the job market also fell to minus 27.9 in May from minus 23.4 in April, while the index on the job market over the next six months dropped to minus 31.8 from minus 28.5.

In addition, the survey found respondents turning more cautious toward Taiwan's stock market because of potential trade friction between the United States and China and geopolitical tensions in the Middle East.

According to the survey, the optimism index on the stock market fell for the third straight month to minus 29.2 in May from April's minus 19.4, while the index gauging investors' appetite to take risks also fell to minus 7.1, from minus 4.2 previously.

Cathay Financial said the weakening sentiment on the stock market also reflected concerns of a pullback in the Taiwan Stock Exchange's benchmark index as it moved closer to the 11,000-point mark after it closed above 10,000 points for the first time in 17 years in May 2017.

The weighted index ended up 1.25 percent at 10,966.20 on Monday amid reduced worries over a possible trade war between Washington and Beijing after they said in a joint statement that they had agreed not to impose tariffs on each other's products, putting a trade war on hold.

In May, about 69.2 percent of respondents said they expect the local economy to grow at a pace of more than 2 percent in 2018, down from 70.2 percent in April, and they foresaw average economic growth of 2.16 percent, below the government's forecast of 2.42 percent made in February, Cathay Financial said.

The survey collected 16,912 valid questionnaires online from clients of Cathay Life Insurance and Cathay United Bank, which are 100 percent owned by Cathay Financial.

Source: Focus Taiwan News Channel