📈 Sri Lanka Business Confidence Rebounds to 151 in July Amid Macro Recovery

• Business Sentiment (BCI): The LMD-PepperCube Business Confidence Index surged 19 points to 151 in July 2026, reversing a 20-month low of 132 in June. The barometer sits 25 points above its historic median (126), though it trails its 12-month average (170) and the July 2025 figure (190). • Macro Economic Performance: The World Bank reclassified Sri Lanka as an upper-middle income economy following a 5.0% expansion last year. Q1 2026 GDP grew 5.1% YoY, driven by growth in industry (+7.2%), services (+3.4%), and agriculture (+1.1%). • Market Developments: LP gas distributors Litro and Laugfs cut retail prices in early July in line with falling global energy costs, though anticipated fuel subsidies are yet to take effect. • Key Risks & Outlook: Business optimism remains cautious due to external threats. The IMF raised its 2026 global inflation forecast to 4.7%, citing potential supply chain disruptions and market instability from Middle East conflicts.