Business sentiment down in Asia
Index for region drops from 66 to 62 in fourth quarter, with Thailand and Philippines showing sharp declines and India and China improving
Business sentiment among Asia's top companies has dropped sharply in the final quarter of this year, extending the third quarter's declines, with global economic uncertainty and rising costs weighing on the region's firms, a Thomson Reuters/INSEAD survey found.
The Thomson Reuters/INSEAD Asia Business Sentiment Index fell from 66 in the third quarter to 62 in the fourth - the lowest reading since the third quarter of last year. A reading above 50 indicates an overall positive outlook.
There is a fundamental problem that there’s still too much debt
Sentiment in Southeast Asia's US$1.5 trillion economy was undermined by political turbulence in Thailand, which sent its sentiment index plummeting to 40, and a typhoon in the Philippines, which saw its index fall to 58. The figures were the lowest for both countries since the poll was first compiled in 2009.
China scored 75 and India 82 to support the regional index, but export-driven East Asian economies such as South Korea as well as regional trading hub Singapore also showed weaker readings, underscoring still-anaemic global business conditions.
"The global economic recovery is still very fragile," said Zhang Shiyuan, an economist at Shanghai-based Southwest Securities.
"There is a fundamental problem that there's still too much debt," he added. "It's a time bomb that may be detonated if monetary and fiscal policies don't co-ordinate well."
The survey showed that the car sector was the most negative, with a reading of 33, a sharp drop from 63 in the third quarter, followed by the food and resources sectors with fourth-quarter scores of 50.