THE COST OF LIVING
THE COST SPIRAL RECEDES
Both the cost of living index and official rate of inflation trend down
The PepperCube Cost of Living Index (CLI) saw a marginal decrease in May. Having started the year on a high, the index fell twice in a row, then edged up briefly and dropped again: from 92 in April to 91.2 in May – a 0.8 decline.
Compared to a year ago too, the CLI is 0.2 points lower.
Likewise, the Colombo Consumer Price Index (CCPI) witnessed a change in May with inflation dipping to 0.9 percent year on year after rising to 1.5 percent in April. This is the second time this year that inflation has fallen to 0.9 percent, the first being in March.
Meanwhile, 97 percent of respondents believe that the cost of living has increased either ‘highly’ or ‘moderately’ over the past 12 months. This percentage remains unchanged from the previous month’s findings.
And only three percent of the sample population feel that costs have ‘stayed the same’ or ‘decreased,’ matching the percentage recorded in April. Looking ahead to the next 12 months, expectations of a ‘highly escalating’ cost of living improved slightly in May. More than six in 10 (62%) of executives hold this belief, representing a two percent decline from the preceding month’s results.
Additionally, over a quarter (26%) of respondents anticipate a ‘moderate escalation’ in costs, reflecting a two point increase.
Seven percent expect costs to remain unchanged while two percent are optimistic about a ‘slight decrease’ in their expenses.
However, the majority of poll participants (84%) remain pessimistic, believing they ‘will not have a chance’ to purchase non-food items in the next 12 months, which is two points lower than in the month prior.
And finally, 11 percent expect no change in the cost of living while three percent hold hope of being able to purchase non-food items.
