Business Sentiment: Corporate Confidence Dips Amid Global & Local Uncertainty 📉

The latest LMD-PEPPERCUBE Business Confidence Index (BCI) reveals a decline in optimism as the initial 2026 surge fades, influenced by geopolitical shifts and domestic health concerns. • Index Performance: The BCI fell by 11 basis points, dropping from 182 in January to 171 in February. This remains 18 points below the 12-month average (189) and significantly lower than the 204 recorded in February last year. • Macroeconomic Indicators: Sri Lanka’s official reserve assets saw a marginal 0.2% decline in January, settling at US$ 6.824 Bn. • Governance & Corruption: A notable highlight is Sri Lanka’s progress on the Corruption Perceptions Index (CPI), climbing 14 places. This suggests a perceived improvement in institutional integrity and public sector governance. • Sectoral Pressures: The business environment remains fragile following disruptions from Cyclone Ditwah. While the Central Bank maintains that economic growth targets remain intact, PepperCube Consultants note lingering fears of a slowdown. • External Risks: Global volatility, including potential US tariff threats and regional health concerns (Nipah virus), continues to weigh on the trade and investment outlook. _Summary based on LMD-PepperCube February 2026 data._