Financial Daily from THE HINDU group of publications
Friday, Dec 10, 2004
Corporate - Outlook
India Inc heads optimism chart again, says survey
New Delhi , Dec. 9
INDIAN businessmen appear to be the most optimistic about the prospects of the country's economy. And what is heartening is that this is so for the second successive year.
The initial results of the 2005 International Business Owners Survey (IBOS) conducted by Grant Thornton in 24 countries show that business owners of mid-sized companies globally are much more optimistic about their economy than they were a year ago. The most optimistic of them all, for the second year in succession, are in India and top the list with an optimism/pessimism balance of 88 per cent.
The optimism/pessimism balance is obtained by deducting the percentage of pessimistic businessmen from that of the optimistic business owners. In the case of India, while 89 per cent of the Indian businessmen were optimistic about the economic prospects, only one per cent of them were pessimistic, thereby leaving a balance of 88 per cent, as the remaining nine per cent remained non-committal.
According to Mr Vishesh Chandiok, International Practice Partner, Grant Thornton India, "The pace of fiscal, economic and industrial reforms has not only continued under the new Government, but appears to have gathered speed. India Inc is emerging bigger, faster and stronger. India is also fast becoming the world's knowledge centre and back office. With an economist at the helm of the Government, far-reaching economic reforms and enterprise of Indian entrepreneurs, I believe India will continue to outshine others for some time to come."
Also remaining very optimistic, as per the survey, are the raw material-producing countries such as Australia, Canada and South Africa. The greatest surge in optimism, as compared to last year, is in Ireland (up 72 points to 79 per cent), Poland (up 53 points to 21 per cent) and two of the post-SARS Asian economies, namely, Singapore (up 92 points to 62 per cent) and the Philippines (up 51 points to 50 per cent).
On the other hand, businessmen in Japan are the most pessimistic about their country's economy with an optimism/pessimism balance of minus 27 per cent, although the despair level is slightly lower than last year (-46 per cent). Incidentally, like last year, Japan is the only country with a negative balance in the survey and is at the bottom of the list. China is not among the countries surveyed.
Before Japan, the countries, which make up the least optimistic list, are Italy (seven per cent), Spain (nine per cent), Taiwan (14 per cent) and Russia (14 per cent).
Companies in 13 out of the 24 economies surveyed are much more optimistic than in the previous year and show an increase of over 10 per cent in their optimism/pessimism balance. Bucking this trend significantly are only three countries the US, Russia and Spain with more than a 10 per cent drop.
Significantly, despite the overall optimistic results, the impact of terrorism did affect the views of business owners. Nearly a third (29 per cent) of the businessmen noted that terrorism had made them more pessimistic about their economy. This was most notable in Mexico (53 per cent), Spain (49 per cent), Taiwan (42 per cent), Poland (37 per cent), Italy (35 per cent), Japan (35 per cent), Germany (34 per cent), the Netherlands (31 per cent), the US (31 per cent) and Russia (29 per cent). The 2005 IBOS was carried out among 6,300 owners of medium-sized businesses from 24 countries. Grant Thornton International is a non-practising, non-trading international umbrella organisation, which does not deliver accounting or auditing services.
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