Sri Lanka consumer demand to recover in 4Q19: FC Research

ECONOMYNEXT- Sri Lanka’s consumer demand is expected to remain weak until the last quarter of 2019 after the Presidential Election is announced, the research arm of First Capital, an investment house, said.

"First Capital Research expects the recovery in demand to be at a significantly slow pace considering the severity of the impact to all sectors by the Easter Sunday attacks and the subsequent incidents," a report said..

"We expect demand to normalise by the fourth quarter of 2019, supported by the possible improved sentiment with the announcement of the Presidential Election," FC Research said.

Inflation in the capital Colombo has increased in 2019. However, the central bank is attributing this increase in price levels to the depreciation of the rupee in 2018.

The rupee fell by as much as 20 percent in 2018, as the central bank lost control over the soft-pegged currency.

The central bank’s Business Sentiment Index for the second quarter of 2019 fell to the lowest levels in five years, as firms braced for a dip in manufacturing due to lower expected demand, sales, and business climate.

The central bank is attempting to stimulate growth with a cut in policy rates in May, after pushing down retail deposit rates in April in a bid to increase lending. (Colombo/Jun14/2019)

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