Business confidence increases

Key index shows entrepreneurs optimistic despite slowing growth.

Confidence among business leaders rebounded for the first time in a year this quarter, despite the cooling economic climate.

A key gauge, the entrepreneurs’ confidence index, rose to 70.2 percent in the first three months, 1.8 percentage points higher than the last quarter in 2011.

Economists forecast that GDP growth may hit bottom in the January-March period and then recover thanks to a further easing in monetary policy and a rebound in fixed investment.

Another indicator — the Entrepreneurs Macro-Economy Heat Index — that gauges opinion about the current economic climate was not as optimistic as it registered 39.2 percent in the first quarter, compared with 41.7 percent three months earlier.

Over the year, the index has dropped by 12.3 percentage points, according to a central bank survey of 5,000 companies.

The index has been below 50 for nine months. A reading below that mark means contraction, above indicates expansion.

GDP growth in the first quarter may slow to 8.2 percent from a year earlier and be pushed up later by social housing and infrastructure investment.

A growth target of 7.5 percent has been set for 2012 from last year’s 8 percent, the slowest in eight years. This is a consequence of a complicated global economic situation that provides space to further structurally transform the domestic economy.