Business confidence gains ground

Saturday, 4 May 2024 00:45 - - {{hitsCtrl.values.hits}}

In its May edition, leading business magazine LMD reports that “business confidence strengthened for a second month although the horizon remains overcast.”

LMD notes: “In April, the LMD-PEPPERCUBE Business Confidence Index (BCI) breached the 90 points threshold for a second consecutive month. The barometer registered a marginal increase of three basis points to reach 96, which is 11 notches higher than the median for the last 12 months (85).”

But the index continues to lag behind its all-time average of 123, the magazine observes, adding that “it is 12 points below where it stood a year ago (108), which was when the IMF framework was put to bed.”

PepperCube Consultants attributes the outcome of its exclusive poll for LMD to an increase in optimism among corporates over the economy and their expectations of maintaining sales volumes over the next 12 months.

It asserts that despite “acclimatisation to the higher VAT,” high taxes remain a challenge for businesses as is the interest rate regime.

A spokesperson for LMD said: states: “PepperCube also notes that despite the increase in political activity in recent weeks, economic pressures continue to overshadow politics and the political culture.”

“The reality is that businesses continue to grapple with key indicators such as high costs, high taxes and relatively high interest rates,” she added.

The magazine cautions that “the trajectory of the index in the next six months or so is likely to remain uncertain, given the prospect of political turmoil ahead of the election season.”

LMD’s publisher, Media Services, says the latest edition of the magazine will be released shortly. Its digital version has been shared on the publisher’s social media platforms (the full BCI report will be uploaded on its website – www.LMD.lk).