Perceived Economic Opportunity PEO: Second Quarter 2018

September, 21, 2018

This brief report of the Perceived Economic Opportunity (PEO) presents the analysis of a random survey carried out using a random sample of 400 men and women covering all districts in Sri Lanka on their expectations of economic prospects in the ensuing twelve months.



Analysis of the perceived economic opportunities in the months of April, May and June 2018 indicate that the expectations in terms of job prospects of people or developing the status of their business in the ensuing 12 months has reduced compared to the first quarter of year 2018.

The same expectation showed a growing trend in the month of December 2017. The expectation showed a decrease in the first quarter 2018. Comparing to the month of March 2018, the expectation fell down in the month of April 2018 but increased sharply in the month of May 2018. However, the same showed a decreasing trend in the month of June 2018.

In March, the inflation in the country stood at 2.8 percent and declined to 1.6 percent in the month of April. The inflation increased to 2.1 percent in the month of May and 2.5 percent in the month of June.

Sri Lank recorded the highest foreign reserves, amounting to 9.9 billion US dollars in the duration of January to April, but the rupee depreciated by 3.1 percent against the US dollar during the same time period.

The Central Bank of Sri Lanka said that the Sri Lankan rupee continued to weaken in May and June due to the strength of US dollar in the international market.

Sri Lanka’s external sector displayed a mixed performance in June 2018. Even though the lowest trade deficit so far during the year in absolute terms was recorded in the month of June, the trade deficit widened significantly in comparison to June 2017 as the growth in import expenditure outpaced the increase in export earnings. Earnings from tourism increased notably in June 2018 continuing the growth momentum observed since the beginning of the year, although workers’ remittances declined during the month in comparison to June 2017.

In addition, loans to private sector by commercial banks slowed down during this period and as a result the money expansion weakened.

The below graph shows the change of expectations in terms of job prospects of people, or development of the status of their business, in the ensuing 12 months.

Refer the graph 01 below;




According to the analysis in the months of April, May and June 2018, the expectation among the people to save a little more from their personal earnings in the ensuing 12 months has decreased compared to the first quarter of year 2018.  The graph shows that the expectation has dropped significantly from the month of April 2018.  Please Refer the Graph 02;




The expectation for reduction of corruption in the country showed a significant positive trend in the first quarter 2018. However, the same expectation declined in the Second quarter of 2018 (April, May, June).

Please Refer the Graph 03;


PEO; Perceived Economic Opportunity is developed and surveyed by the Foundation for Economic Freedom in Sri Lanka. PepperCube Consultants carry out field research covering the entire country.