• Increased disposable income post-crisis fuels consumption
• Higher remittances, wage growth, and lower inflation drive revenue growth

Sri Lanka’s listed consumer sector revenue is expected to increase by about 20% year-on-year (y-o-y) for the financial year 2024/25 as disposable income has increased post crisis, Softlogic Stockbrokers said.

Speaking to The Daily Morning Business, Softlogic Stockbrokers Research Co-Head Raynal Wickremeratne said that Sri Lanka’s nominal GDP per capita has grown to $ 4,500 per person in 2024 with the 5% GDP growth in economy.

This indicates that per capita GDP has grown beyond the pre-crisis high of $ 4,300 per person recorded in 2018.

Wickremeratne said that public sector and private sector wage rates have improved, where private sector saw gradual improvements and public sector wages will have improvements with the budget 2025.

With the monthly average of remittances increasing to $ 605 million in the first quarter of 2025 from $ 512 million in 2024, Wickremeratne said that remittances are now being used for consumption purposes instead of construction or property investment purposes, a pattern which changed after Covid-19 and the economic crisis.

“Also, the credit card base in Sri Lanka has increased by about 5% in 2024, and inflation being in the negative territory, shows prices are cheaper than they used to be,” he added.

When taking all these factors in collectively, Wickremeratne noted that there is a significant increase in disposable income.

Therefore, he said that consumer sector company revenues are expected to rise by 20% compared to the previous financial year.

“Given the historical strength of second-half earnings and most counters already surpassing 50% of profits recorded in second half of 2023/24 financial year by the third quarter of 2024/25 financial year, we expect most Consumer sector counters to deliver a notable performance in fourth quarter of 2024/25 financial year,” Softlogic Stockbrokers said.