Sri Lanka’s sole barometer of business confidence edged up to above where it stood a year ago despite ominous signs that the economic crisis is unlikely to abate anytime soon,” says LMD, in its forthcoming March edition.
It explains: “The BCI edged up by two basis points from the previous month to register 124 in February, which represents a 10-month high. This means that the unique index is four notches higher than a year ago and a healthy 15 points above its 12-month average of 109.”
This is the third month in succession that the barometer has headed north, despite the state of the economy, the forex crisis, ongoing shortages of essentials and an on-off power scenario, the leading business magazine observes.
NielsenIQ’s Director – Consumer Insights Therica Miyanadeniya says in LMD: “In spite of rising COVID-19 cases, life seems to go on. Businesses and the people are learning to live with virus, it seems; and the fear that it commanded in the past has diminished.”
A spokesperson for LMD states: “Businesspeople may continue to adopt a longer-term perspective if there’s a resolution to the forex crunch in sight – and for that to materialise, there are increasing calls for debt restructuring measures to be adopted.”
“A solution to the power crisis and the impact of the war in Ukraine will also weigh on the minds of corporates in the shorter term,” he adds.
Media Services, which publishes LMD, says the latest edition of the pioneering magazine will be released shortly, along with its digital version which will be shared on WhatsApp and the publisher’s social media platforms.
Former Central Bank of Sri Lanka Governor Dr. Indrajit Coomaraswamy added weight to this statement, asserting that Sri Lanka has had opportunities to use its location and standard of living, to attract foreign investments and drive exports but economic reforms are critical to enable the country to move forward.
Despite this outlook, the outcome of the latest LMD-Nielsen Business Confidence Index (BCI) survey paints a slightly more positive picture.
NielsenIQ’s Director – Consumer Insights Therica Miyanadeniya offers insights into the latest survey results: “, it has been both a difficult and turbulent year for businesses, the population and the country as a whole… Sri Lanka has paid a high price, and it’s hoped that 2022 will bring new life and energy to a country reeling from the fallout from COVID-19.”
Miyanadeniya asserts: “As business, people and the nation look forward to a better year, business confidence is likely to continue rising as corporates formulate new strategies to salvage and improve on what was lost due to the pandemic in 2021.”
However, she warns that the outlook might not be as positive for consumers, noting that “the price of goods and services is escalating, more and more shortages are being experienced, and there may be a need to continue tightening our belts in the future.”
She noted that a drastic improvement in sentiment would be unlikely unless the myriad challenges facing the country were addressed.
That being said, given that Sri Lanka’s economic challenges are set to continue in the new year – with uncertainty marring the global landscape as well – the direction of the BCI is likely to hinge on how the government plans to avert a state of economic failure.
