CHOGM and Budget gives a boost to confidence in economic opportunity
Monday, 30 December 2013 01:27
Last month we speculated that confidence in economic activity perhaps could improve after the Commonwealth Heads of Government Meeting (CHOGM) in Colombo and the 2014 Budget. It did.
The Perceived Economic Opportunity Index (PEOI) finally saw some positive upward movement recording the highest level since December last year; again boosted by the Budget.
While respondents continued to state their disappointment in the high cost of living and inability to save, the optimism came from their perception that they had been able to advance in their job or business, and more importantly their belief these opportunities would increase.
Whether this is a flash in the pan given the major activity and media hype around the CHOGM and the Budget presented immediately thereafter or whether it is a more sustainable shift upwards that will push the PEOI above the threshold of 2 from its current 1.7 will become clearer in the coming months.
The PEOI is calculated on a monthly basis using a random sample of 100 persons based on seven questions: one each on income, saving and cost of living; one each on law and order, media freedom and corruption; and one question on opportunities to advance in the respondents job, profession or entrepreneurial activity.
The answers can only have three possibilities; the current situation with regard to each issue is worse than it was six months ago, the same or better than six months ago. A score of 3 is that Sri Lankans are becoming relatively more optimistic about the emerging opportunities while 1 is they are becoming relatively more pessimistic. A score of 2 indicates no change.
Therefore, the trend is a more important indicator of changing perceptions than the absolute number.
The Perceived Economic Opportunity Index was developed and is measured by the Foundation for Economic Freedom in Sri Lanka. Fieldwork is carried out by market research agency PepperCube Consultants.