INSUBCONTINENT EXCLUSIVE:
A quarterly business confidence index put out by economic think tank National Council for Applied Economic Research -- N-BCI -- dropped by
over 30% in the last quarter of the previous fiscal year, it said on Friday.
The N-BCI fell to 77.3 from 111.2 in the third quarter, and the
lowest since 1998 when business sentiment was low due to the Asian financial crisis.
This was its 112th survey round conducted in
March.
According to the report, sentiment was already lower by the third quarter, but dropped significantly in March during the time when
the ongoing nationwide lockdown to contain the Covid-19 virus outbreak was first announced.
“A weekly examination of the four components
showed that business sentiments took a turn for the worse during the fourth and fifth weeks of March, coinciding with the announcement of
the first Covid-19 lockdown on March 24,” the report said.
Part of the institute’s Business Expectations Survey (BES), the index showed
a decline in sentiment across the board from the 600 companies it tracks.
Expectations were low in micro and macro factors, across sectors,
regions and across large, medium and small firms.
The survey consists of four questions, two on macro and the other two on micro sentiments,
relating to the respondents’ own firms
The questions on macro sentiments, “The overall economic conditions will be better in the next six months” and “The present investment
climate is positive”, saw a decline of 21 percentage points each.
The two questions on micro sentiments, “The financial position of
firms will improve in the next six months” and “The present capacity utilisation is close to or above the optimal level”, saw a drop
of 13.3 and 11.6 percentage points, respectively.
