Stock Market Mania but Weak Domestic Demand? Experts Reveal Why the Wealth Effect is Failing in Taiwan

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.