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Sri Lanka’s Economic Sentiment Remains Dull – Survey

June, 20, 2018

Recently released LMD-Nielsen Business Confidence Index (BCI) survey reveals that economic optimism in May this year remained relatively unchanged from the previous month, and analysts also highlight that economic sentient remains dull.

Although 7% (up from 5% in the previous month) of corporate executives believe economic conditions will improve over the next 12 months according to the LMD Survey, the majority (57% versus 48% in April) of respondents expect the economy to ‘stay the same’ during this period.

The business magazine LMD’s survey notes that half the survey participants view the investment climate unfavourable – and one business person points to “constant political fluctuations and economic instability”. Meanwhile, conditions are considered ‘fair’ by 44% of respondents with the remainder holding a positive view.

However the survey reveals that one survey participant had noted that people and businesses feel uncertain about the economy, whilst another executive highlights the tourism industry as one of the few industries unaffected by the prevailing economic climate based on the evidenced by the growth in tourist arrivals compared to the same period last year.

LMD highlight that short-term business prospects remain stable, with 18% of respondents expecting sales volumes to increase in the next three months. But prospects for the long-term have dimmed with only 13% (down from 20% in the prior month) of those polled expecting volumes to improve in the next 12 months.