Perceived Economic Opportunity PEO: August, 2017

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.

STATUS OF JOB PROSPECTS OR BUSINESS PERFORMANCE

Analysis of the perceived economic opportunities in the month of August 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 decreased compared to July 2017. The same expectations showed an increase in the month the of July.

This expectation has been shrinking and increasing from time to time since October 2016 and shows that these reductions and increases have not occurred in large numbers. In other words, this expectation has not undergone major changes during this period.

Inflation rose to 7.9% in August from 6.3% in July 2017. The food category and the non-food category have contributed tothe increase in inflation.

Meanwhile, despite the increase in export earnings in August 2017, the trade deficit widened amid an increase in imports.

Also, even though the earnings from tourism have increased, the widening of the trade balance and reduction of remittances has negatively impacted the foreign current account.

The export earnings surpass the billion dollar mark in the month August, for the second consecutive month, showing the positive impact of G. S. P Plus.

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

Refer the graph 01 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 August 2017.

ABILITY TO SAVE

According to the analysis in the month of August 2017, the expectation among the people to save a little more from their personal earnings in the ensuing 12 months, has stabilized compared to the month of July 2017.  Therefore, it is seen that the same expectation has not been reduced or increased in August compared to July. Please Refer the Graph 02;

EXPECTATION FOR REDUCTION OF CORRUPTION

The expectation for reduction of corruption in the country which showed an increased trend in the month of July 2017, took a dramatic fall in the month of August 2017.

But, the same expectation showed a positive trend in the month of June 2017 and continued to the month of July 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.

Sri Lanka appointed a Special Presidential Commission of Inquiry to investigate the controversial Central Bank bond issue and recommend action in the month of January 2017 and it is significant that the investigation has reached an important stage by the month of July 2017.

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.