In spring 2024, over 95% of German businesses in Sri Lanka reported a favourable business environment, with the percentage of companies experiencing improvement more than doubling since Fall 2023.
“However, the Asia/Pacific region’s performance has declined compared to Fall 2023. Despite an improved business situation in Sri Lanka, there is a decrease of optimism for the next 12 months, primarily due to concerns about the upcoming general election,” said a report by AHK Sri Lanka Business Barometer – Spring 2024.
“As a result, most companies do not plan to increase investments; instead, they intend to maintain their current investment levels. Nevertheless, businesses are more optimistic about local economic development than they were 6 months ago. Workforce development plans of German businesses in Sri Lanka have grown by 7.72%, and the number of companies planning to reduce employment has drastically declined from 23% in Spring 2023 to just 4.26% in Spring 2024. However, exchange rate volatility and economic policy conditions remain major concerns, although the prices of energy and raw materials have declined. Commenting on the global scenario the report said that most companies rate their business situations as satisfactory at 46.92%.
“ MENA region reported the most favourable business environment for German businesses, while Greater China has remained the least satisfied since Fall 2023. Asia has fallen to the 11th position in this ranking, a significant drop from 7th place in Fall 2023, placing it just above Greater China.”
Despite the current unfavorable business situation in Asia/Pacific (excluding China), the region remains optimistic about business development over the next 12 months.
With 53% of businesses in the Asia/Pacific region anticipating an improved business environment, it ranks as the 4th most optimistic region globally.
Compared to Fall 2023, the Asia/Pacific region in Spring 2024 shows a 4% increase in businesses reporting “better,” rising from 49% to 53%, while those reporting “worse” decreased by 3%. With 34% of German companies in the Asia/Pacific region (excluding China) expressing optimism, it ranks as the third most optimistic region for economic expectations.
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