Business confidence on the rise: Danareksa

Business confidence on the rise: Danareksa

The Jakarta Post, Jakarta

Indonesian business confidence rose in the June and July period
for the first time since September last year, in the belief that
the economy will fare better during the period of August 2003
until January 2004, according to a Danareksa Research Institute
survey.

The survey also revealed that the Business Sentiment Index
(BSI) rose by 2.1 percent.

The confidence of businessmen in the government, to provide a
conducive business climate, also rebounded after sliding
consistently since September 2002.

"Rising the fastest in the index measuring business executive
index is the government's ability to drive the economy up on the
back of a downtrend in the interest rate of Bank Indonesia
promissory notes (SBI), which lends hope for loan rates to go
down," the survey, which was released on Sunday, stated.

It said, that the continued decline in the SBI rate has
presented upbeat expectations for companies to pay lower interest
charges, while also offering reasons for bank time deposit
holders to convert their deposits into investments in the real
sector in an environment that appears safe and orderly.

Against these positive expectations, chief executive officers
(CEOs) are adequately convinced that economic recovery will pick
up. But the survey added,"without stronger fundamentals, the
economic recovery story may end prematurely."

The central bank, thanks to a continued benign inflation, has
been slashing its SBI rate, with the current level -- of 8.66
percent -- an all-time low.

The survey included more than 700 chief executives or
directors, representing a wide variety of leading companies in
various sectors, namely construction, agriculture, finance,
transportation and communications, manufacturing and hotel and
restaurant services.

The survey is designed to measure CEOs' assessments of the
current economy and business conditions, and their expectations
for the next six months.