THE COST SPIRAL OSCILLATES

Cost of living indicators reflect contrasting trends as the indices fluctuate

The PepperCube Cost of Living Index (CLI) saw a marked decrease in June – the index dropped for the second consecutive month to the lowest it has been since June 2021, which was at the height of the pandemic.

This was also the lowest count recorded thus far this year with June registering 83.6 on the CLI – that’s a notable 7.6 decline from the month prior.

The other side of the coin is that in June, the Colombo Consumer Price Index (CCPI) spiked to 1.7 percent year-on-year – from 0.9 percent in May.

Meanwhile, perceptions shifted with 91 percent of respondents saying that the cost of living in the previous 12 months has increased either ‘highly’ or ‘moderately.’ This represents a fall of seven percentage points from the prior month’s findings.

Compared to the three percent reported in May, eight percent of the sample population feel that costs ‘stayed the same’ or ‘decreased’ in June.

Looking ahead to the next 12 months, anticipation of a ‘highly escalating’ cost of living tapered in June: nearly six in 10 (59%) of surveyed executives said so, representing a three percent decline from the preceding month.

Furthermore, less than a fifth (18%) of participants expect a ‘moderate escalation’ in expenses, which is a fall of eight percentage points. Seven percent anticipate a ‘decrease’ in their spending while 11 percent do not expect a change.

However, the majority of respondents (74%) are still pessimistic, believing they ‘will not have a chance’ to purchase non-food products in the next 12 months – this however, is 10 points less than in May.

Additionally, 13 percent anticipate that living expenses won’t change and nine percent believe they will be able to afford non-food products.

 – 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.