Sri Lanka’s LMD-Nielsen Business Confidence Index shows increase in confidence in February 2018
The latest edition of business magazine LMD has reported that the LMD-Nielsen Business Confidence Index (BCI) has increased by a single basis point to 128 in February.
In the March edition of the magazine, Nielsen’s Managing Director Sharang Pant has reportedly noted that “businesses are probably wary of the impact on the economy stemming from the results of the Local Government (LG) elections”.
He has pointed out: “Business leaders continue to highlight that consumption especially in urban Sri Lanka is still subdued on account of high inflation.”
While observing that sentiment regarding the economy has dampened compared to January, LMD has stated that only 16% of respondents expect an improvement over the next 12 months.
In contrast, the majority (43%) of respondents feel that economic conditions ‘will get worse,’ the magazine has noted.
The outlook for business prospects also seems to have worsened with the exclusive monthly survey revealing that only three in 10 corporate executives expect an improvement in the short and long terms, down from January’s 35% and 38% respectively. In addition, the magazine observes that the business community is seemingly skeptical about the investment climate with just over one in 10 respondents considering this to be a good time to invest.
According to LMD, businesses are concerned with issues such as political instability, corruption and ‘ethnic conflicts’ – although one respondent cites the development of infrastructure facilities as a sign of progress that will prove essential to economic growth.
OSL take:
The marginal increase shown in the LMD-Nielsen Business Confidence Index for the month of February 2018 indicates that despite the local government elections held in Sri Lanka and the political uncertainty that ensued afterwards, business confidence levels in the country have remained somewhat intact. It would build confidence in the minds of investors keeping a watch on Sri Lanka.
| Article Code : | VBS/AT/20180315/Z_2 |