Business confidence falls to a post-war low

Monday, 8 October 2018 00:00 - - {{hitsCtrl.values.hits}}

The latest edition of leading business magazine LMD reports that the LMD-Nielsen Business Confidence Index (BCI) shed eight basis points to register a lowly 87 in September – its lowest level since April 2009, in fact. The index is also well short of its 12-month average of 109.

In the October issue of LMD, Nielsen’s Managing Director Sharang Pant observes: “The fact that year on year inflation has also crept up from 2.5% in June to 3.4% in July has not helped and businesses are worried about how this will impact consumption, which was displaying signs of a recovery.”

In addition, he states that “the improvement in the external sector and trade in services (exports and earnings from tourism) is not helping tide over local macro concerns.”

LMD reports that high taxes, the depreciation of the rupee, political interference and policy instability rank among the main concerns in business circles. Echoing these sentiments, a survey respondent asserts that “there is a lack of forward thinking by the Government when it comes to policy implementation.”

A spokesperson for LMD notes that a decline over four consecutive months doesn’t bode well for the index in the near term but adds that “sentiment may rebound slightly next month if the business community has hopes that Budget 2019 will bring some respite.”

Media Services, which publishes LMD, says the latest edition of the magazine will be released to leading bookstores and supermarkets on 5 October (for the full BCI report, visit www.LMD.lk).