Taipei: Confidence in Taiwan's economy improved in January with the latest government data indicating the local economy has turned warmer, a survey released by Cathay Financial Holding Co. showed Tuesday.

According to Focus Taiwan, citing a survey conducted from January 1-7, Cathay Financial, the largest financial holding firm in Taiwan by total assets, showed 34.4 percent of respondents said the economy improved in January, while 32.4 percent believed it deteriorated. These results translated into a current-month economic optimism index of 2.0 in January, up from minus 7.3 in December.

In addition, the six-month economic outlook index also improved, rising from minus 6.9 in December to minus 0.1 in January. Cathay Financial said the improvement in confidence came as the National Development Council's (NDC) November economic monitoring data showed the local economy flashed a warming "yellow-red" light indicating it is closer to "overheating" conditions in the current AI boom.

Cathay Financial reported the index assessing willingness to buy big-ticket items rose from 10.0 in December to 11.7 in January, while the index evaluating willingness to buy durable goods also increased from minus 12.7 to minus 9.6.

The survey found the optimism index toward the local stock market rose from 25.1 in December to 37 in January, driven by a rate cut cycle by the U.S. Federal Reserve and expectations of higher earnings posted by listed firms. The index measuring willingness to take risks also climbed from 18.1 to 23.9.

In the January survey, respondents estimated Taiwan's 2026 economic growth at 3.06 percent on average, with 57 percent expecting annual growth to exceed 3 percent. The poll also revealed expectations for the local consumer price index (CPI) growth to reach 2.17 percent in 2026, with about 52 percent anticipating the CPI would average over 2 percent for the year, surpassing the central bank's alert level.

The survey collected 14,917 valid online questionnaires from clients of Cathay Life Insurance and Cathay United Bank, which are wholly owned by Cathay Financial.