July business confidence down on election worries
July business confidence down on election worries
Bloomberg, Jakarta
Indonesia's Business Sentiment Index fell in July from May as political risk increased during the country's first direct presidential election, a bimonthly survey showed.
The gauge, which measures business confidence, fell to 113.1 at the end of July from 113.4 two months earlier, according to Stefanus Susanto and David Sumual, analysts at Danareksa Research Institute, which commissioned the AC Nielsen bimonthly study of between 650 and 750 chief executives.
Indonesia held the first round of the presidential election on July 5 after four weeks of campaigning. Incumbent Megawati Soekarnoputri and Susilo Bambang Yudhoyono, a former cabinet minister, won the most votes in that round to contest a second, decisive round of balloting on Sept. 20.
"June was a campaigning month, filled with wariness of possible street violence, while July was the unparalleled election month," the analysts wrote in a report. "CEOs were cautious of exercising major decision as risks from the political arena mounted.
The Expectations Index, which measures the executives' appraisal of near-term business conditions, fell to 119.4 from 119.8.
Based on the latest official tally of votes, Yudhoyono is poised to become the country's sixth president. He has won 61 percent of the 110.4 million votes counted so far to Megawati's 39 percent. More than 153 million Indonesians were eligible to vote in the Sept. 20 election.
Danareksa's survey
Index July May
Business sentiment index 113.1 113.4
Present situation index 106.8 107.0
Economic conditions 68.7 69.3
Business conditions 115.6 115.5
Company conditions 136.2 136.1
Expectations index 119.4 119.8
Economic prospects 92.2 92.4
Business prospects 124.8 125.0
Company prospects 141.2 142.1
Business confidence in government index 87.8 88.9