Consumer confidence rises in August in post-Rajapaksa recovery

Rising optimism driven by views about long-term prospects for country, with public remaining pessimistic about their own situation and near-term future.

The Institute for Health Policy (IHP) released the August 2022 update of its Consumer Confidence Indices, which are generated from its Sri Lanka Opinion Tracker Survey (SLOTS).

All three of IHP’s consumer confidence indices significantly improved through August, although all remain pessimistic. The recovery dates from the resignation of President Rajapaksa on 14 July, indicating that his departure has been the key factor lifting public sentiment in past two months.

The Index of Consumer Sentiment (ICS), the broadest measure of the public’s view on their personal economic status and the national economy, increased five points to 11 points in August, recovering to levels last seen in February 2022. The Index of Consumer Expectation (ICE), a measure of perceptions about the future, increased the most, rising eight points, whilst the Index of Consumer Conditions (ICC), which reflects current conditions, increased only five points.

The larger gains in the ICS and ICE compared to the ICC indicates the recovery in consumer sentiment is mostly improvements in public expectations about the longer-term future rather than their perceptions of the current situation or immediate prospects. Expectations about the country in five years’ time improved the most (+10). There was less improvement in views about the next 12 months (+7 in personal situation, +8 in country situation), and even less in views about current buying conditions (+2) and respondents’ personal financial situation (+2).