RESPITE FROM THE COST SPIRAL

Businesspeople sense a marginal improvement in the cost of living milieu

The PepperCube Cost of Living Index (CLI) registered a fall in February in comparison to the preceding month – the first decline since October last year. The index shed more than two basis points from 94.6 in January to 92.5 a month later.

It’s noteworthy too that the Colombo Consumer Price Index (CCPI) also registered a decline in inflation from 6.4 percent in January to 5.9 percent in February – it is therefore, seemingly edging down to the monetary authority’s target of five percent over the medium term.

In the latest poll conducted by PepperCube, a massive majority (97%) of surveyed respondents continue to feel that the cost of living has escalated either ‘highly’ or ‘mode­rately’ over the past 12 months – that’s a two percent decline from the previous month.

And three percent believe that costs remained the ‘same as before,’ which is two percentage points higher than in January.

Expectations regarding a ‘highly escalating’ cost of living in the next 12 months also trended down with around three-quarters (67%) of executives saying so – this marks a six percent improvement from January.  Meanwhile, slightly over a fifth (21%) anticipate a ‘moderate’ increase, eight percent foresee the cost of living milieu to remain unchanged and only two percent are optimistic that costs will ‘decrease.’

As in the preceding month however, 88 percent of poll participants continue to believe that they ‘will not have a chance’ to purchase non-food items in the next 12 months – and only seven percent anticipate that there will be no change in the cost of living.

Lastly, a mere two percent have hope of a ‘slight chance’ to being able to purchase non-food items during this time.

– 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.