The LMD-Nielsen Business Confidence Index (BCI) climbed 11 notches to register 101 in January, according to the latest edition of LMD.
This puts the index only one basis point shy of its average of 102 for the last 12 months. Nielsen’s Managing Director Sharang Pant explains: “Following two months of uncertainty, stability seems to be returning to the Sri Lankan political scenario. This has had a certain impact on [business] sentiment.”
Furthermore, he notes that “the rupee continues to slide due to dollar pressure but inflation is under control. Sentiment regarding the tourism industry is positive as well – this despite the short-term impact on tourist arrivals late last year.”
LMD reports that the economy, politics and corruption are considered to be among the main concerns for the nation. Meanwhile, the value of the rupee and inflation are the notable sensitivities in corporate circles.
“Sri Lanka is currently in a debt trap and the depreciation of the rupee is pushing the country further into debt. The authorities should act first on strengthening the value of the rupee; or else the economy will be adversely impacted,” observes one corporate executive.
Regarding the outlook for the index, a spokesperson for Media Services, the publisher of the leading business magazine, says: “It is anybody’s guess as to what the future holds for business and the BCI, given that the pre-constitutional crisis status quo has been restored to some degree, and that we may witness one or more elections this year.”
Media Services says the latest edition of the magazine will be released to leading bookstores and supermarkets on 8 February (for the full BCI report, visit www.LMD.lk).
Rupee ends firmer; CSE gains