THE COST OF LIVING
CAUTION AMID DIP IN INFLATION
Cost of living deadlock plays out while inflation patterns remain positive
The tug-of-war of the PepperCube Cost of Living Index (CLI) is in a deadlock. This is evidenced by the slight shift of 0.1 basis points from 91.4 in May to 91.5 in June – which has been the pattern since March this year.
So the CLI has remained largely stagnant over the past four months with minor oscillations between 89.7 and 91.5 points.
Meanwhile, the downward trajectory of the Colombo Consumer Price Index (CCPI) continues: the CCPI recorded a 13.2 percent drop in June to 12 percent. This rate of inflation was last recorded back in December 2021. Since then, we have consistently experienced double-digit inflation – without any relief!
In theory at least, the downward spiral in inflation should lead to positive outcomes for consumers. However, 97 percent of polled executives (one percentage point higher than in May) believe that the cost of living in the past 12 months has escalated ‘highly’ or ‘moderately.’
According to PepperCube’s latest survey, there has been a slight improvement in sentiment with 85 percent of participants saying they expect the cost of living to escalate ‘highly’ or ‘moderately’ in the next 12 months. This outcome reflects a two percentage point decline from the previous month.
And only three percent of respondents express hope of a fall in the cost of living.
In addition, 60 percent of poll participants believe they ‘will not have a chance at all’ to purchase non-food items or save money over the next 12 months while only two percent remain optimistic.
Since March last year, a substantial portion (50-70%) of respondents have consistently said they will not be able to afford non-food goods and services or save, due to the high cost of living and economic conditions.
