Taipei:Confidence in the local economy improved in October as an index assessing optimism toward the stock market hit a new high, according to a survey released by Cathay Financial Holding Co. on Tuesday.

According to Focus Taiwan, the survey conducted by Cathay Financial, Taiwan's largest financial holding firm by total assets, revealed that 42.8 percent of respondents believed the economy would improve over the next six months, while 23.1 percent anticipated a decline. This resulted in an economic optimism index of about 19.7 in October, up from 14.8 in September.

The optimism index for current economic conditions also improved, increasing from 16.5 in September to 20.0 in October. In particular, the optimism index for the local stock market rose to a new high of 55.0 in October, up from 49.1 in September. The index assessing the appetite for risk also saw an increase, reaching 35.0 from 32.9, attributed to an AI boom.

With the general economic optimism, Cathay Financial's index for expectations of wage increases over the next six months climbed to a new high of 25.3 in October, up from 20.6 in the previous month. This optimism in wage growth led to a rise in the index measuring the willingness to buy big-ticket items, which increased to 19.1 in October from 18.3 in September. Similarly, the index for willingness to buy durable goods rose to minus 3.3 from minus 3.9.

The survey indicated that approximately 49 percent of respondents believed the strong economy would positively impact their household finances, while 14 percent felt their family finances would worsen. Respondents also predicted that Taiwan's average economic growth in 2026 would be 10.94 percent, with 55 percent expecting annual growth to exceed 11 percent. This forecast is slightly below the 11.05 percent estimate made by the Directorate General of Budget, Accounting and Statistics (DGBAS) in mid-August.

Additionally, the poll found that respondents expected the local consumer price index (CPI) to grow by 2.52 percent on average in 2026, with about 52 percent anticipating the CPI increase to surpass 2.5 percent for the year. The DGBAS forecast a 2.07 percent rise in the 2026 CPI.

The survey collected 13,461 valid online questionnaires from clients of Cathay Life Insurance and Cathay United Bank, both wholly owned subsidiaries of Cathay Financial.