Sri Lanka’s growth prospects for 2021 had dimmed from around 5% that was expected in October amid a surge in the COVID-19 pandemic. This was revealed in the latest data released by the Census and Statistics Department with much delay. The Department of Census and Statistics revealed that the GDP growth rate for the second quarter of 2020 has been estimated as negative 16.3%.
The country is now walking on a tightrope, economic analysts said, adding that the government’s inclination would be to carry on as much as possible to contain the health crisis but ensure that the economy keeps its stability continuing.
Business Confidence in Sri Lanka is expected to be 37 points by the end of this quarter, eroding investor sentiment according to Trading Economics' global macro models and analysis.
The Business Condition Index measures entrepreneurs’ sentiment about current business situations and expectations with regard to business conditions.
It includes profitability, skilled labour availability, demand, sales and capacity utilization.
However, Business Confidence in Sri Lanka increased to 45 points in the third quarter of 2020 from 20 points in the second quarter of 2020, the Central Bank said.
The latest LMD-Nielsen Business Confidence Index (BCI) survey reveals that sentiment surrounding the economy diminished in November with only 23% of businesspeople consulted expecting economic conditions to improve in the coming 12 months – a decline from 34% in the preceding month.
Nearly half (48%) of the survey respondents say the economy is likely to deteriorate during this period while 29% of executives expect it to ‘stay the same’.
The business outlook for the next 12 months appears to have improved with 58% of poll participants expressing the view that sales volumes will increase (compared to 50% in October).
On the other hand, only a quarter of corporate executives believe that their business prospects will improve in the next three months – down from 31% in the previous month.
Meanwhile, the majority of those consulted by Nielsen say that sales volumes have decreased so far compared to the previous year.
As for the investment climate, 12% of respondents consider conditions to be ‘good’ or better (versus 29% in October). Conversely, 67% say that the climate is ‘poor’ or worse while 11% believe it is fair.
Leave your comments
Login to post a comment
Post comment as a guest