📈 Business Sentiment Recovers Slightly Amid Global and Energy Pressures

The LMD-PEPPERCUBE Business Confidence Index (BCI) nudged up by 7 points in May to 148, clawing back some ground from April's sharp dip. Despite this cautious stability, sentiment remains well below last year’s highs as businesses navigate a storm of external shocks. • Overall Index & Projections: The BCI stands at 148, which is 22 notches above its historic median (126) but 32 points below its 12-month average (180). Compared to May last year (196), confidence is down considerably. Projections indicate limited short-term improvement, with uncertainty remaining a defining theme. • Energy & Tariff Pressures: Domestic operations are heavily impacted by fuel price volatility, experiencing four rounds of fuel price hikes in just five weeks. This has triggered successive electricity tariff revisions on 1 April and 11 May due to high power generation costs. • Macro & Forex Indicators: The Sri Lankan Rupee has depreciated by approximately 5% so far this year, compounding forex vulnerabilities. Official reserve assets declined by US$ 267 Mn, settling at US$ 6.76 Bn by the end of April. • Global Context: West Asian geopolitical tensions have pushed global crude oil prices toward four-year highs and constrained the Strait of Hormuz, severely squeezing import-dependent economies. • Non-Economic Concerns: Public and corporate anxiety is being further aggravated by rising cybercrime incidents targeting banks and government institutions, threatening digital and financial safety. _Note: Based on published index data and institutional commentary._