THE COST OF LIVING
The PepperCube Cost of Living Index (CLI) saw a notable increase in July, rising to 69.9 – a major 10.4 point shift from June – likely indicating a turnaround in consumer sentiment and changes in key cost drivers.
Meanwhile, the Colombo Consumer Price Index (CCPI) remained in deflationary territory, recording a year-on-year rate of deflation of 0.3 percent in July compared to 0.6 percent in the previous month.
COST SENTIMENT SHIFTS GEAR
The cost of living index registers a sharp shift with negativity holding sway
Respondents’ perceptions about the cost of living showed signs of negativity compared to the previous month. Eighty-five percent believe the cost of living has ‘highly’ or ‘moderately escalated’ over the past 12 months – an increase of six percentage points from June’s findings.
In July, slightly over one in 10 (13%) of survey participants said that costs either ‘stayed the same’ or ‘decreased’ – that’s a notable drop of seven points from the preceding month.
And expectations of a ‘highly escalating’ cost of living edged up with 35 percent of polled executives anticipating higher prices over the next 12 months – this represents a 15 percentage point increase from June.
Twenty percent of respondents expect a ‘moderate escalation’ in their expenses – unchanged from the month prior. And slightly over a quarter (26%) anticipate their spending ‘will remain the same,’ which is a decline of 15 points from June.
Additionally, 12 percent believe the cost of living ‘will decrease’ over the next 12 months – a count that has remained steady for the third consecutive month.
Notably, well over half (57%) of the survey population say they ‘will not have a chance’ to purchase non-food items in the next 12 months, signalling an increase of nine percentage points.
And finally, nearly a quarter (24%) expect their spending to ‘remain the same,’ reflecting an 11 point drop, while 14 percent are optimistic about being able to afford non-food products – that’s two points higher than in June.
– 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.
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