Biz confidence plunges sharplyBusiness confidence in the country has nosedived points as a result of as supply disruption and fuel shortage due to India-imposed trade embargo and protracted Tarai unrest, an official survey has shown.
Business confidence in the country has nosedived points as a result of as supply disruption and fuel shortage due to India-imposed trade embargo and protracted Tarai unrest, an official survey has shown.
The business confidence index has plunged to 27 this year from 50 last year, according to the Business Confidence Survey conducted by the Finance Ministry among 300 firms across the country between September and November. A reading under 50 suggests that the business confidence is falling.
The better business confidence last year was due to the formation of a new government after the second Constit-uent Assembly election.
The unrest in Tarai, where most of the industries are based, has continued for nearly four months, while the country has been facing the Indian trade blockade for the last two and half months. As a result, around 90 percent of the industries have remained closed, trading activities have slumped due to transportation problems amid fuel shortages and hotels, restaurants and the overall tourism sector have been hit hard.
The survey was conducted among firms related to 33 sectors, including various industries, wholesale and retail trading, hotel, agriculture, real estate, telecom, contractors, hydropower and other infrastructure.
Under Secretary Basu Sharma, who coordinated study, said business confidence slumped drastically due to the extraordinary situation during the study period. “Due to the political turmoil, business environment has remained unpredictable,” he said. “Fuel shortage, energy crisis and transport problems have taken toll on the businesses,” he said.
The government has forecast the economic growth of 2 percent or lower for this fiscal year in recently presented White Paper, from initially projected 6 percent, while the Nepal Rastra Bank has warned the economy could suffer a negative growth of 1 parent if the impact of the blockade remains until mid-January.
At a programme here on Wednesday, Finance Minister Bishnu Prasad Poudel said the government, the private sector and all stakeholders should put in joint effort to improve the current situation so that business confidence could rise.
Chief Economic Advisor at the Finance Ministry Gobinda Nepal asked the private sector to have patience, stating the government would bring a clear action plan for improving the economic situation.