Business leaders in India remained largely positive, but their level of optimism has dropped to its lowest level in four years even as it has hit a two-year high in the Asia-Pacific, according to a Grant Thornton report.
Asia Pacific business optimism has hit a two-year high, largely driven by improvements from its two biggest economies, China and Japan, and region-wide positivity on prospects for increased trade. However, not all trajectories are heading upwards, the report titled ‘Asia Pacific: trading and thriving’ showed, adding that India’s optimism mostly remained positive at 75%, but “has dropped to its lowest level in four years”.
Australia and New Zealand are on the same boat too, as optimism in Australia dropped to 58% from 75% a year ago and New Zealand’s is down to 68%, the lowest in two years.
“In the last 12 months, businesses in India have had to deal with the impact of radical reforms such as demonetisation, country-wide consolidated indirect tax and a new bankruptcy regime,” said Vishesh C. Chandiok, national managing partner, Grant Thornton India.
Chandiok, however, added that “with the largest gain of any country in the ‘World Bank ease of doing business ranking’ and favourable macro-economic conditions, India remains one of the few bright spots in the global economy”.
Grant Thornton’s International Business Report survey data showed that India’s businesses are the most positive in the region at 58% when it comes to the opportunity presented by increasing spending power of the rising middle class. The biggest threat to the region cited by businesses is the trend of ageing populations, followed by regional conflict regarding competing territorial claims and the rebalancing of China’s economy.
“Businesses across the region are grappling with a range of economic, cultural and political challenges, despite their overall positive outlook. If left unaddressed, these challenges could overshadow the growth prospects the report has identified,” said Rodger Flynn, Grant Thornton regional head for Asia-Pacific.