Over 50% expect pay raise next year: Cathay Financial – Focus Taiwan

Taipei, Nov. 20 (CNA) Cathay Financial Holding Co. said Monday that a recent survey showed more than 50 percent of its clients expect to get a pay raise in 2024.

Although 51.9 percent of respondents believed that their incomes would increase next year, only 25.2 percent said they expected to receive a wage increase of over 3 percent, Cathay Financial said.

The survey results indicate that many believe businesses will follow the lead of the government, which will raise Taiwan’s monthly minimum wage by 4.05 percent to NT$27,470 (US$867) and the minimum hourly wage from NT$176 to NT$183 from next year, Cathay Financial added.

Cathay Financial said that 64 percent of respondents said their wages had not changed in the last six months, with 18.1 percent reporting an increase and 17.9 percent a decline.

Meanwhile, 24.8 percent of the respondents said the local economy improved from six months earlier, while 48 percent said it had deteriorated.

The figures translate into an economic optimism index for the current economic conditions of minus 23.2 in November, a more pessimistic assessment than the minus 21.4 in October.

The survey also found the economic optimism index over the next six months stayed unchanged from a month earlier at minus 9.1 in November.

According to the National Development Council, Taiwan’s economy ended 10 consecutive months of contraction in September.

In its most recent report, the NDC said its index gauging economic conditions sat in the “yellow-blue” range, indicating sluggish growth, an upgrade from a “blue light” signaling contraction.

However, the NDC said its leading indicators, which assess the economic climate over the next three to six months, moved lower by 0.77 percent from a month earlier to 97.88 in September, the sixth consecutive monthly decline.

Cathay Financial said the further drop in the leading indicators prompted many of those surveyed to stay cautious about the local export-oriented economy at a time of global demand weakness amid high inflation and aggressive interest rate hikes by the major central banks in the world.

Cathay Financial said that such caution was also reflected in the indexes gauging the willingness to purchase big-ticket items and durable goods, which fell to 7.0 and minus 15.4, respectively, in November from 7.2 and minus 13.8 in October.

Meanwhile, the optimism index on the local stock market fell to minus 0.4 in November from 4.1 in October, and the index assessing investors’ appetite to take risks also moved lower to 10.3 from 11.9 amid volatility on the global equity markets, Cathay Financial said.

Respondents in Cathay Financial’s November survey pegged Taiwan’s 2023 economic growth at 1.6 percent, unchanged from a similar survey in October, with only 21 percent saying they expected annual growth to top 2 percent.

The 1.6 percent growth predictions came close to a forecast from the Directorate General of Budget, Accounting and Statistics, which said in August that Taiwan’s economy would grow 1.61 percent, a downgrade from a 2.04 percent estimate made in May.

The survey also showed the respondents expected growth in the local consumer price index (CPI) to reach 2.5 percent in 2023, unchanged from the October poll, while about 84 percent expected the CPI to exceed 2 percent, the alert level set by the central bank.

The survey collected 14,287 valid online questionnaires from clients of Cathay Life Insurance and Cathay United Bank, which are wholly owned by Cathay Financial.