Business confidence remains subdued in Botswana
Mmegi.bw - Jul 5th, 09:12
Local businesses remain unenthusiastic about the current state of the local economy, citing weak demand, cost of finance as well as concerns about the cost of fuel, the Bank of Botswana's latest Business Expectations Survey has revealed.
Published on Friday, the biannual Business Expectations Survey (BES) reports on current confidence levels among local businesses as well as their expectations of movements in key economic
indicators.Respondents to the latest BES carried over their pessimism from the September edition of the survey, with overall business confidence about the first half of 2013, unchanged from the previous assessment at 47 percent.Sixty-four percent of respondents were optimistic that business conditions would improve in the second half of the year, with the number rising to 74 percent for the period up to June 2014."As has been the case in past surveys, concerns over limited domestic demand were the most commonly-cited challenges by respondents," a statement on the BES reads.
"This is consistent with fiscal consolidate on measures being implemented by the government, including restrained growth in salaries. This is followed by equally-ranked concerns over the cost of finance and availability of skilled labour".
Concerns on cost of finance, however, could have softened as the central bank has cut interest rates twice by a total of one percent, since the finalisation of the BES. The Bank of Botswana noted negative notes among businesses across various business factors.
"Negative sentiments regarding rising costs of all inputs, including utilities, transport and wages, remain generally strong, although somewhat less so than in the previous survey, and with the notable exception of rent," the statement reads."The only category where expectations of an increase have risen since the previous survey is transport, indicating continuing concern over the price of fuel".
Businesses participating in the BES forecast 2013 real growth at 5.4 percent, marginally lower than the 5.9 percent projected by government in the 2013 Budget Speech. Participants pegged 2014 growth at 4.9 percent.
The International Monetary Fund has pegged 2013 growth at 4.1 percent, while the World Bank expects five percent. The Bank of Botswana has said growth this year will largely be similar to the 3.7 percent measured last year.
Looking beyond the current period, BES participants were more optimistic, although still cautious about local and international developments."While looking ahead there is some increased optimism, the protracted global economic slowdown continues to have a negative impact on prospects for the domestic economy and confidence remains fragile," the BES statement reads.
The current BES covered 98 businesses in agriculture, mining, manufacturing, water and electricity, construction, trade, transport, and financial and business services. Sixty percent of surveyed businesses responded compared to 68 percent in the September 2012 survey. From Mmegi.bw
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