INFLATION BREAKS FREE!

The unique cost of living index falls and inflation nosedives after 19 months

At long last…! The PepperCube Cost of Living Index (CLI) registered a free fall in July; the CLI shifted from 91.5 in June to 85.4 – a decline of 6.1 basis points. This is only the second time it has fallen below 90 since March last year with the only exception being when the index dipped to 89.7 in April 2023.

However, the most significant shake up occurred with the drop in the Colombo Consumer Price Index (CCPI), which transitioned to single digits following a 19 month stint in double digits to stabilise at 6.3 percent.

This is a notable contrast to its last appearance in single digits back in November 2021 (9.9%).

Despite the notable disinflation however, sentiment among surveyed executives remains unchanged from June.

Ninety-seven percent said the cost of living rose ‘highly’ or ‘moderately’ over the past year whereas none believed that it ‘decreased.’ On the contrary, according to PepperCube’s latest poll, there’s been a notable improvement among the surveyed sample population with only 22 percent expecting the cost of living to escalate ‘highly’ or ‘moderately.’

The difference is significant with 13 percent changing their expectations.

There’s also an improvement in the number of respondents who express hope that the cost of living ‘will decrease a little’ with eight percent saying so.

Meanwhile, half of the polled executives believe they ‘will not have a chance at all’ to purchase non-food items in the 12 months ahead, which is a drop from 60 percent in June.

Meanwhile, seven percent (from 2% in June) believe they’ll ‘have a slight chance’ of purchasing non-food items – this single digit trajectory has continued since August 2021.

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.

 – LMD