Sri Lanka’s business confidence picks up amidst renewed optimism in Augus.
Daily FT: Leading business LMD reported that ‘confidence barometer has headed north after two successive months of stagnation.”
It added: “There is indeed cause for cautious optimism as the LMD-NielsenIQ Business Confidence Index (BCI) has risen by 32 basis points – from the dismal 49 registered in the consecutive months of June and July to 81 in August.” In August last year, the barometer recorded 98 basis points and an upward trajectory thereafter, until as recently as March this year. It is hoped that this ascent augurs a similar inclination, the magazine notes.
A spokesperson for LMD said: “While we cautiously raise our hopes, we must be mindful that the index is still as uncomfortably below its all-time average of 125. How the business community views the interim budget proposals along with the outcome of staff level talks with the IMF will likely determine where the index heads next month.”
NielsenIQ Director – Consumer Insights Therica Miyanadeniya remarked: “The introduction of the QR code and rationing of fuel has greatly reduced queues… The immediate concern is the high rate of inflation, which continues to rise unabated.”
LMD also reported: “There is an air of optimism in business circles – for example, the number of corporates who were doubtful about the economy improving has diminished from 83 percent in July to 73 percent a month later. It added: “At the same time, small and medium size businesses are struggling for their very survival – not unlike during the height of the pandemic – which may mean that the ‘working poor’ will be hard-pressed to earn higher wages despite seeing their disposable incomes dwindle.”
The pick up in Sri Lanka’s business sentiments that have been recorded is indicative of the overall resilience of the country’s economy. Sri Lanka’s economy has faced many internal and external challenges through the years and has shown great resilience by bouncing back and returning to normalcy. This was witnessed during the period of the three decades of civil war, 2004 tsunami devastation, Easter Sunday attacks of 2019, the global Covid-19 pandemic and its ensuing challenges. Sri Lanka’s economy has, in all these instances, been resilient and is once again on the path to normalcy amidst the ongoing economic crisis. Sri Lanka continues to target becoming an emerging business destination in the South Asian region supported by the geographical positioning in the Indian Ocean and the many trade agreements as well as trade concessions enjoyed by the country. With Sri Lanka showing a strong business potential, foreign businesses/investors could confidently explore the growing business/investment opportunities in the country.
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