Business confidence improving, says MoF

KATHMANDU, June 29:

Business confidence of private sector has improved since the formation of the interim election government led by Chief Justice Khil Raj Regmi, says a business confidence index prepared by the Ministry of Finance.

“The BCI has stood at 48 percent over last three months,” Dr Basudev Sharma, under secretary at the Privatization Cell of the finance ministry, said, presenting the report on Friday.

The BCI stood at just 39.7 percent in 2012, according to the study conducted by the Federation of Nepalese Chambers of Commerce and Industry (FNCCI).
"It´s an improvement, but we can not that things have improved absolutely,” Finance Minister Shankar Prasad Koirala said after launching the report. “It shows that we heading in the right direction."

According to the report, BCI below 50 percent is considered worse. Similarly, BCI rating of more than 50 percent is regarded as better.
"The improvement in business confidence is mainly due to the introduction of full-fledged budget in April and recovering global economy,” said Shanta Raj Subedi, secretary at the finance ministry. “The government is committed to introduce different programs in the upcoming budget to boost the confidence of private sector."
The report was prepared based on a survey conducted at 300 firms all over the country.

“These firms ranged from carpet/handicrafts manufacturers, food processing plants, real estate agencies, technology and telecommunication operators, contractors, infrastructure developers and tourism enterprises," Sharma elaborated.

According to Sharma, respondents in those firms were different questions related to financial condition or profitability, investment situation, employment situation, business cost and sales order or export order.

"The report shows that the real estates sector has the lowest business confidence among all the sectors included in the survey," Sharma said, adding, “It seems that confidence of real estate sector won´t improve at least until 2015."

Highlighting the impact of the economic policy of the government, the report reads, "Seeing the figures and analytical tools and its validation it can be concluded that the existing scenario of economic policy has become successful to some extent in regaining the confidence of the private sector.”
The MoF has identified transitional political situation and weakness in governance as the major economic challenges in the country. "Energy crisis is also a big challenge for the business sector," reads the report.

Source: Republica