GDP Growth Rate
GDP Growth: The Engine That Drives Sri Lanka's Stock Market
The GDP Growth Rate is a key indicator of Sri Lanka's economic health, and it has a significant positive impact on the Sri Lankan stock market in a few ways:
Corporate Earnings Growth: A growing economy typically translates to better performance for companies. As the economy expands, businesses tend to experience higher sales and profits. This can lead to increased earnings per share (EPS), a key metric that investors use to value stocks. Higher EPS generally translates to higher stock prices.
Investor Confidence: A strong and growing GDP instills confidence in investors. They become more optimistic about the future prospects of companies operating in a healthy economy. This optimism can lead to increased investment activity in the stock market, driving up stock prices.
Company Valuations: When the GDP grows, companies are generally perceived as having more growth potential. This can lead to investors applying higher valuation multiples to their stocks, further boosting their prices.
GDP Rate Documentation