THE COST OF LIVING
CONSUMER PRICES ON A PIVOT
Will the relief offered in Budget 2026 be offset by a post-cyclone price spiral?
The PepperCube Cost of Living Index (CLI) rose in November, reversing its three month downward trend by climbing to 62.9 – a 2.7 point increase from October’s 60.2.
On the other hand, the Colombo Consumer Price Index (CCPI) stood still, recording a year-on-year rate of inflation of 2.1 percent – as in October.
It remains to be seen whether the relief offered in the government’s 2026 budget will be offset by the expected cost of living spiral following Cyclone Ditwah, in which case both indices could head upwards – at least in the short term.
Respondents’ perceptions about the cost of living remain largely unchanged from the month prior. Seventy-eight percent believe the cost of living has ‘highly’ or ‘moderately escalated’ over the past 12 months – a slight increase of three points from October (75%).
Twenty percent of survey participants say that costs have either ‘stayed the same’ or ‘decreased,’ marking a two point decline from the preceding month.
Expectations of a ‘highly escalating’ cost of living rose with 18 percent of polled executives anticipating higher prices over the next 12 months – up two percentage points from October.
Meanwhile, 32 percent expect a ‘moderate escalation’ in their expenses – a three point increase from October – while a third (33%) believe their spending ‘will remain the same’ (up 1%).
And only 12 percent feel the cost of living ‘will decrease’ over the next 12 months (October – 15%).
When asked about their ability to purchase non-food items in the next 12 months, 51 percent of the survey population said they ‘will not have a chance,’ reflecting a six percentage point spike from October.
Three in 10 (30%) expect their spending to ‘remain the same’ (down 4%) while 16 percent (which is one point lower than in October) remain optimistic about affording non-food products.
– LMD
FOOTNOTE An index based on a monthly survey, the CLI aims to measure and understand perceptions regarding the cost of living as opposed to reported or official inflation.
