Perceived Economic Opportunity Index up slightly in April

Wednesday, 30 May 2012 00:48 - - {{hitsCtrl.values.hits}}

The Perceived Economic Opportunity Index (PEOI) that had been on a downward trend since the beginning of 2012 having lost the momentum generated by the November 2011 Budget, moderated in April with the PEOI registering an increase since March, albeit being very marginal.

The current level of optimism however is relatively low and is only better than the lowest registered in March 2012. The significant fall in that month very likely reflected the significant pessimism associated with the unexpected and sudden fall in the currency, hikes in interest rates and upward revision of administered utility and fuel prices as per the Index compiled by Foundation for Economic Freedom in Sri Lanka. The PEOI is calculated on a monthly basis via a random sample of 100 persons based on seven questions: one each on income, saving and cost of living; one each on law and order, media freedom and corruption; and one question on opportunities to advance in the respondents job, profession or entrepreneurial activity. The answers can only have three possibilities; the current situation with regard to each issue is worse than it was six months ago, the same or better than six months ago.

A score of 3 is that Sri Lankans are becoming relatively more optimistic about the emerging opportunities while 1 is they are becoming relatively more pessimistic. A score of 2 indicates no change. Therefore, the trend is a far more important indicator of changing perceptions than the absolute number.

The Perceived Economic Opportunity Index is calculated by the Foundation for Economic Freedom in Sri Lanka in partnership with Friedrich NaumannStiftung Fur Die Freiheit. Fieldwork is carried out by market research agency PepperCube Consultants.