Saturday, 18 March 2023 07:46

Sri Lanka’s economy’s contraction persists in this year as well Featured

Hot on the heels of the worst ever contraction of 7.8% in 2022, the economy’s struggle is persisting and recovery remains most challenging this year as well judging by the latest update from the Purchasing Managers Indices.

The February PMIs for both manufacturing and services activities reflect further contraction reinforcing the view that the confidence factor is far from being restored despite multiple Government efforts to stabilise and spur economic growth.

Other analysts opined that the macro and policy environment in the first two months of the New Year weren’t conducive to stimulating the economy.

The Manufacturing PMI recorded an index value of 42.3 in February its compiler Central Bank (CBSL) said, and added it indicated a continued setback in manufacturing activities on a month-on-month basis.

This setback was driven by subdued performance observed in new orders, production, employment and stock of purchases, CBSL said.

The services sector PMI, CBSL aid, dropped to an index value of 48.7 in February indicating a deterioration across the services sector. This was driven by the declines observed in new businesses, business activities, employment and backlogs of work.

New businesses declined in February compared to January, particularly with the decreases observed in transportation, insurance and postal and courier sub-sectors



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