The LMD-Nielsen Business Confidence Index (BCI) increased by a single basis point to 128 in February, the latest edition of business magazine LMD reports.
In the March edition of the magazine, Nielsen’s Managing Director Sharang Pant notes that “businesses are probably wary of the impact on the economy stemming from the results of the Local Government (LG) elections”.
He also points out: “Business leaders continue to highlight that consumption especially in urban Sri Lanka is still subdued on account of high inflation.”
While observing that sentiment regarding the economy has dampened compared to January, LMD notes that only 16% of respondents expect an improvement over the next 12 months. In contrast, the majority (43%) of respondents feel that economic conditions ‘will get worse,’ the magazine notes.
The outlook for business prospects also seems to have worsened with the exclusive monthly survey revealing that only three in 10 corporate executives expect an improvement in the short and long terms, down from January’s 35% and 38% respectively. In addition, the magazine observes that the business community is seemingly skeptical about the investment climate with just over one in 10 respondents considering this to be a good time to invest.
LMD notes that businesses are concerned with issues such as political instability, corruption and ‘ethnic conflicts’ – although one respondent cites the development of infrastructure facilities as a sign of progress that will prove essential to economic growth. A spokesperson for LMD states that following the LG elections, business sentiment might waver due to the political climate: “Whether the state of affairs will remain the same is in serious doubt with the nation and its corporates preparing for further political uncertainty.”
LMD’s publisher Media Services says the March edition of the magazine is now available in leading bookstores and supermarkets. For the full BCI report, visit www.LMD.lk.