Perceived Economic Opportunity PEO: May, 2017

This brief report of the Perceived Economic Opportunity (PEO) presents the analysis of a random survey carried out using a sample of 400 men and women in May 2017 covering all districts in Sri Lanka on their expectations of economic prospects in the ensuing twelve months.

Status Of Job Prospects Or Business Performance

Analysis of the perceived economic opportunities in the month of May 2017 indicates that the expectations in terms of job prospects of people or developing the status of their business in the ensuing 12 months has been increased compared to April 2017.

The expectations in terms of job prospects of people or developing the status of their business shows a positive trend in the month of February 2017 compared to the month of January 2017. However the same was decreases in the month of March 2017. It is a significant status as the same expectation showed a continuous increase from December 2016 to February 2017.

The same expectations were increased to 12 percent in the month of November and stabilized at same in the month of December 2016.

Inflation, as measured by the change in the National Consumer Price Index (NCPI)

(2013=100), which is compiled by the Department of Census and Statistics, increased to 8.6 per cent in March 2017 from 8.2 per cent in February 2017, on year-on-year basis. However, it again decreased to 8.4 per cent in the month of April 2017 and 7.1 per cent in the month of May 2017.

Meanwhile, exports earning showed a growth in the month of March 2017 compared to the downward trend of the months of January and February 2017.

Export earnings were increased by 9.8 per cent in the month of March 2017 compared to the same in March 2016.

Although exportearnings increased in April 2017, the higher growth in import expenditure resulted in an expansion of the trade deficit.

Despite the increase in tourist earnings in April 2017, the decline in workers’ remittances together with the expanded trade deficit moderated theperformance of the external current account.

The expectations in terms of job prospects of people or developing the status of their business in the ensuing 12 months stood at 15 percent in the month of December 2014 and increased to 40 percent in the month of January 2015 soon after the new government assumed office.

Refer the graph below;

These reasons are likely to have had an impact on the expectations of job prospects and the business activities of the people in the month of May 2017.

Ability To Save

According to the analysis in the month of May 2017, expectation among the people to save a little more from their personal earnings in the ensuing 12 months had shown a continuous increase.  The reason for the upward trend is most likely the decreasing inflation in Sri Lanka.  (Please Refer the Graph 02)

Expectation For Reduction Of Corruption

The expectation for reduction of corruption in the country started to fall in March, and the expectation continued to fall even for the third month, in the month of May 2017.

The higher expectation for the reduction of corruption in the country that many expected at the time the current government came into office has gradually decreased in past months. But it is significant to note that this perception took a dramatic fall in October 2016   likely due to the much publicized issue of the probe by the Parliamentary Committee on Public Enterprises, or COPE.

The same was continued in the month of December 2016, the survey showed.

However, the expectation showed an increase in the month of January 2017 likely due to the reason as Sri Lanka appointed a Special Presidential Commission of Inquiry to investigate the controversial Central Bank bond issue and recommend action in the same month.

(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.

The Perceived Economic Opportunity was developed and is measured by the Foundation for Economic Freedom in Sri Lanka (FEF) in partnership with Friedrich Naumann Stiftung Fur Die Freiheit.