By: Staff Writer
July 21, Colombo (LNW): After a brief resurgence in optimism during May, business confidence in Sri Lanka has taken a sharp turn in June, reflecting renewed concerns over the country’s economic trajectory, according to the latest edition of LMD magazine. The July issue reveals that the fragile recovery in business sentiment has already begun to unravel, with broader concerns overshadowing earlier hopes of sustained economic improvement.
The findings come from the latest LMD-PEPPERCUBE Business Confidence Index (BCI) survey conducted in early June. The survey shows a significant 20 percentage point drop in the number of business leaders who believe the economy will improve over the next 12 months — falling from 76% in May to 56% in June. At the same time, 37% of respondents expect the economy to remain unchanged, up from 17% in the previous month, while only 7% foresee a downturn — unchanged from May.
Despite this downturn in overall confidence, there is a silver lining. The report notes a rebound in sales expectations, with 83% of sales professionals predicting an improvement in volumes over the coming year — a nine-percentage-point increase compared to May. This marks the first uptick in three months, suggesting a potential shift in business performance, if not in confidence about the macroeconomic environment.
Additionally, 16% of respondents expect sales to remain steady — down from 24% in May — while only a small fraction predict a decline. Notably, 69% of those surveyed reported an increase in sales volumes in June compared to the previous month, reflecting a modest but meaningful rise from 66% in May.
This divergence — rising sales sentiment amid falling economic optimism — highlights the complex and often contradictory nature of Sri Lanka’s current business climate. While some companies, particularly in the consumer and services sectors, are seeing improved activity, concerns remain about long-term stability, investment inflows, policy direction, and inflation.
Business leaders have repeatedly called for more consistent economic reforms, greater fiscal discipline, and transparent policy-making to support sustainable recovery. The private sector remains cautious, grappling with high interest rates, currency volatility, and fragile consumer demand despite the IMF-backed stabilization program that has helped improve macro indicators such as foreign reserves and inflation.
Meanwhile, LMD’s July edition also features its annual ranking of Sri Lanka’s Best Workplaces for 2025 — a timely focus on human capital and organizational culture at a time when employee engagement and resilience are critical to navigating uncertainty.
More details and the full cover story can be accessed via LMD’s official website at www.LMD.lk.
