Sri Lanka’s state revenue excess reaching beyond Rs. 1,454 billion in the first quarter shows signs of economic resilience, LMD’s Business Sentiment index reports.
“Amid health challenges, the country’s fiscal performance has shown signs of resilience. State revenue during the first four months of the year has risen with government inflows and grants surpassing Rs. 1,454 billion,” the report said.
It added that the month of April saw a surge in revenues, due to the reopening of vehicle imports. “In April alone, tax revenue amounted to in excess of Rs. 463 billion, buoyed in part by the reopening of vehicle imports.”
The barometer of business confidence rises sharply to set a bold new benchmark, despite the country grappling with a multifaceted public health crisis, battling simultaneous outbreaks of dengue, chikungunya (CHIKV) and a new strain of the coronavirus with a majority of affected individuals reported in the Western Province, the report stated.
On the governance front, the pace of legal proceedings has picked up with recent high profile verdicts sparking public discourse on whether the administration will succeed in addressing corruption and uphold the rule of law.
Globally, uncertainty continues to loom: Widely publicised fallout between US President Donald Trump and tech mogul Elon Musk has sent ripples through the political and economic landscape, and there’s now a full-scale war in the Middle East.
Meanwhile, the LMD-PepperCube Business Confidence Index (BCI) soared to a record high in June, climbing 14 basis points to reach an unprecedented count of 210- up from 196 in May.
June’s milestone consolidates the upward momentum observed in May, which was largely driven by the outcome of local government elections. It also surpasses the previous all-time equalling high of 204 recorded in February this year.
The index remains above key benchmarks - standing 86 points higher than its all-time median of 124 and 49 notches above the 12 month average of 161. To put this in perspective, the BCI stood at a modest 101 in June last year, reflecting a notable turnaround in business confidence over the past 12 months.
According to PepperCube Consultants, the surge in confidence is driven by “the belief that while the government’s new economic policies may have a negative impact at present, they will ultimately help stabilise the economy and boost sales and earnings in the future.”