Significant improvement in consumer confidence in March 2023

Although all consumer indices remain pessimistic, the biggest gains were in future expectations suggesting the IMF funding agreement has lifted perceptions

There was broad improvement in consumer sentiment in March, with all three of IHP’s Consumer confidence indices significantly improving, although all remain at pessimistic levels. The Index of Consumer Sentiment (ICS), the broadest measure of the public’s view on their personal economic status and the national economy increased 4 points to 16 points. The ICS ranges from zero to a potential maximum 100, with levels below 50 indicating net pessimism.

Future expectations improved the most, suggesting that the IMF funding agreement with Sri Lanka approved in March and other associated positive economic signals influenced public perceptions positively.

The Index of Consumer Expectation (ICE), a measure of perceptions about the future, improved 5 points to 22 points, but the Index of Consumer Conditions (ICC), a measure of perceptions about current conditions increased only 2 points. In contrast, views about current buying conditions remains unchanged in March, which were at very low levels (below 10 points) indicating consumer demand for large purchases will remain very low.

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