Business confidence weakens due to terror

The Jakarta Post, Jakarta

The upward trend in business confidence in the country was halted in August and September due to the impact of the Marriott Hotel bombing, the Danareksa Research Institute said in its regular survey on Friday.

The business sentiment index (BSI) during the two months stood still at 110.6, defying the previous trend which saw the index rising until July, the survey said.

"Businesspeople are now monitoring cautiously the aftermath of the atrocity, notably the government's policy response to the terrorist assault on Indonesia's soil," it said.

It added that the attacks interrupted the upward course of momentum that had begun at the start of the second half of the year following a slump in the previous nine months.

The bombing took place on Aug. 5 and left more than 10 people dead, while also prompting concerns among many that it would slow the pace of the country's economic recovery.

Danareksa added, however, that a halt to the upward move of the BSI did not necessarily mean a loss of business confidence. "The blast neither shattered Indonesia's economic fundamentals nor narrowed the nation's recovery prospects."

The survey showed that confidence in economic recovery in the last quarter of the year and first quarter of next year remained strong, and had even strengthened.

Business momentum remains because of the police's quick response to the tragedy, helping to prevent a collapse of sentiment, the survey said.

The survey questioned 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, hotel and restaurant services, and others.

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