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Business confidence dips amid uncertainty: LMD-Nielson

30 Nov 2021

The results of the latest LMD-Nielsen Business Confidence Index (BCI) survey – which was conducted before Budget 2022 was presented in Parliament – point to a deterioration in sentiment among Sri Lanka’s business community. The BCI registered a slight fall of two basis points to 109 in November, following three consecutive months of increases. However, this marks an improvement compared to where the index stood a year ago (91) and places it three points above the 12 month average. NielsenIQ’s Director – Consumer Insights Therica Miyanadeniya offered insight into the latest survey’s results: “The Covid-19 situation has abated, and the country has finally opened up with provincial travel restrictions lifted and schools also opening. But the havoc caused by the virus is being felt acutely in every segment of society.” Commenting on the future of the BCI, Miyanadeniya stated: “The road to recovery looks steep with much sacrifice and effort needed, from businesses and the people. With the budget proposals not offering any concessions for either segment, it is likely that both the BCI and CCI (Consumer Confidence Index) will either stay the same or decline once more.”  In the November edition of LMD, it was stated that the business community’s perception of Budget 2022 would be crucial to the trajectory of the index along with the lockdown restrictions being eased. Amid concerns being raised about the Government’s approach to meeting Budget 2022’s revenue targets as the country continues to tackle economic uncertainties on multiple fronts, as well as fears about another wave of the pandemic, it seems unlikely that business confidence will see a drastic improvement – not unless these challenges are addressed. What’s more, the budget proposals are likely to dampen confidence in the near-term at least, given the reactions of chambers of commerce and businesspeople in general. (LMD-Nielson)


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