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Eroding confidence in Sri Lanka's economy

As Sri Lanka faces the threat of financial default, the latest survey by LMD-NielsenIQ Business Confidence Index (BCI) reveals that the majority of Sri Lankans polled (46%) believe that Sri Lanka's economic situation will worsen over the coming 12 months.

The survey further highlighted that 71% of corporate executives polled do not consider this to be a good time to invest. This follows a scathing report by the US State Department which noted that Sri Lanka had one of the most protectionist regimes in the world.

Earlier this year a Bloomberg model reported that Sri Lanka’s default probability was the highest in Asia with the organisation estimating a 27.9% chance of one-year default. Sri Lanka owes at least $2.5 billion in debt over the next 12 months.

Yesterday the US nominee Ambassador to Sri Lanka spoke on Sri Lanka's dire economic situation and the need for the country to turn to the IMF to discuss debt restructuring. However, the Economist has raised doubts over the country's willingness to do so stating that it would "undermine the country’s much-vaunted sovereignty" and would further lose the confidence of its voters.

Read more here.

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