Business sentiment index turns to pessimistic

Business sentiment index turns to pessimistic

JAKARTA (JP): The Business Sentiment Index (BSI) continued on
a downward trend over growing fears that political mayhem might
further affect business progress, according to a survey by
Danareksa Research Institute.

The research agency said on Thursday that the BSI index in the
February-March period declined by 1.3 percent to 113.8 from 115.3
in the previous period.

"Optimism of the chief executive officers (CEO) for their
business remains but their confidence skidded on fears that a
worsening political situation could end in anarchy, ruining their
business prospects," the research agency said.

It further revealed that the Present Situation Index ended
unmoved at 107.5 due to continued uncertainty on the political
front.

The Expectation Index also slipped as CEO's sentiments about
their business outlook were battered by the government's
inability to drag the country out of three years of political and
economic woes, the agency said.

The research agency said that on the back of the decline in
business sentiment was the jittery business environment
underscored by the slide in the business confidence in the
government (BCGI) index that cracked below 100, with pessimism
edging optimism.

"With the BCGI falling to 99.4 from 104.6, most businessmen
are no longer optimistic about the government's ability to ensure
a conducive business environment," it said.

According to the survey, CEOs were pessimistic about the
government's capability to expand the size of their respective
markets which allowed them to get a larger sales value.

The survey also indicated that CEOs doubted the government's
ability to stabilize the economy through its policies which would
enable them to keep a lid on their costs.

They questioned the government's ability to maintain public
utilities, including infrastructure for them to run their
business, it further said.

In addition, the survey disclosed that the CEOs were
pessimistic that the government could create a safe and orderly
environment for their business.

The businessmen also felt uncertain about the government's
capability to enforce the law to ensure they were not hurt
financially by unfair business practices.

"The government has failed to provide a business environment
that was expanding, stable, supportive, secure, and fair," the
research agency remarked.(03)