Stock Market Mania but Weak Domestic Demand? Experts Reveal Why the Wealth Effect is Failing in Taiwan
As the Taiwan stock market hits record highs, experts analyze why economic growth isn't translating into domestic consumption, citing funds trapped in the market and increased spending on overseas travel.
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- 📰 Published: May 30, 2026 at 11:33
- 🔍 Collected: June 1, 2026 at 00:03 (36h 30m after Published)
- 🤖 AI Analyzed: June 2, 2026 at 00:22 (24h 18m after Collected)
The Taiwan stock market is on a roll, with investing becoming a national pastime. However, the massive surge in stock prices has not been reflected proportionally in domestic consumption. Experts point out that while the wealth effect exists, some funds remain in the financial market, while others flow into overseas travel, limiting the impact on the real economy. In 2026, the Taiwan Stock Exchange surpassed the 40,000-point mark, and its market capitalization became the 5th largest in the world. Yet, growth in private consumption remains moderate compared to the stock market rally. Professor Wu Da-ren of National Central University attributes this to investors being reluctant to cash out due to the rapid rise, and the diversion of spending toward overseas travel.
FAQ
Why is the Taiwan stock market so high?
It is largely driven by the growth of the semiconductor industry.