The cost of living index heads north while year on year inflation dips again

The PepperCube Cost of Living Index (CLI) has sat firmly in the ninth percentile since March last year; in December, it registered 95.8, which represents a marginal increase from 93.5 in November.

In contrast however, the Colombo Consumer Price Index (CCPI) dropped by nearly four percentage points to 57.2 percent year on year (from 61% in November), following a five percent fall in the preceding month.

This is the sixth consecutive month the CCPI has rested in the sixth percentile. For the sake of comparison, year on year inflation was only slightly above 12 percent in December 2021!

Ninety-nine percent (that’s one percentage point higher than in the previous month) of executives polled remain convinced that the cost of living in the preceding 12 months escalated ‘highly’ or ‘moderately’ in December. The level of anxiety about cost of living escalations stood at 97 percent 12 months ago – so in that sense, little has changed!

As for sentiment pertaining to the cost of living in the next 12 months, more than nine in 10 of those polled by PepperCube expect prices to escalate ‘highly’ or ‘moderately’ in the next 12 months. In both October and November, 87 percent said so – although in December 2021, a higher percentage (93%) expressed this view.

Of the sample population, 59 percent (down 5% from November) believe they ‘will not have a chance at all’ to purchase non-food goods and services or be able to save in the next 12 months. This compares unfavourably from 12 months ago when less than half (46%) felt this way.

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.