Business confidence in Sri Lanka at 10-year high in January 2025
Daily FT: Pioneering business magazine LMD notes, in its forthcoming February edition, that the unique index that measures business confidence has soared for the fourth consecutive month “as economic indicators strengthen.”
In January, the LMD-PEPPERCUBE Business Confidence Index (BCI) soared by 24 basis points, marking its highest point since January 2015, LMD reports. “The BCI is now approaching its all-time high of 204, recorded in September 2015 – also in the aftermath of a General Election,” it observes.
LMD continues: “Ironies aside, the index now stands 75 points above its historical median of 123 and is 79 points higher than its 12-month average of 119. For context, the BCI stood at 82 basis points at the same time last year.”
Meanwhile, PepperCube Consultants notes in the magazine that improved foreign exchange reserves and healthier trade balances, marked by reduced currency volatility and increased export activity, have boosted sentiment.
A spokesperson for the magazine adds: “How the forthcoming Budget will impact the business community will be key to driving the index in the near term.”
She adds: “The months ahead are likely to be characterised by a mix of uncertainty and speculation, though the pendulum may swing past the BCI’s all-time high against the prevailing backdrop of heightened confidence about the economy.”
OSL take:
The resilience and growth of Sri Lanka’s economy after facing an economic crisis in 2022 indicate the growth and expansion potential in the country’s economy. Sri Lanka’s economic resilience through the years and the path towards becoming a regional hub have all worked to boost business confidence in the country. Foreign businesses/investors have been further attracted by the emerging business/investment opportunities in key economic sectors in the country supported by Sri Lanka’s strategic positioning in the Indian Ocean, the strong trade ties enjoyed by the country with other countries and the many incentive schemes for businesses/investors. With Sri Lanka increasing its annual target for foreign direct investments this year, the growing business confidence bodes well in meeting these targets. Given the expansion shown in Sri Lanka’s key economic sectors and the increasing business potential, foreign businesses/investors could confidently explore the expanding business/investment opportunities in Sri Lanka.
| Article Code : | VBS/AT/20250206/Z_4 |