THE COST OF LIVING
COST BURDEN EASES FURTHER
Signs of relief in the cost of living indicators drive positive sentiment
The PepperCube Cost of Living Index (CLI) has declined for the sixth consecutive month, reaching its lowest point since July 2021 – a trend that is anticipated to persist in the coming months.
The CLI reflects a substantial fall of 17.9 points from the previous month (77.5), to register 59.6 in October – its lowest level this year by far. Additionally, the Colombo Consumer Price Index (CCPI) recorded disinflation once again with the index falling to -0.8 percent year-on-year in October, from -0.5 percent in the preceding month.
Respondents’ perceptions have shifted slightly compared to the previous month. Eighty-seven percent say they believe the cost of living has ‘highly’ or ‘moderately escalated’ over the past 12 months – a slight decrease of two points from September.
Meanwhile, 13 percent of the sample group believe that costs either ‘stayed the same’ or ‘decreased’ in October, marking an increase from 10 percent a month ago.
In October, expectations of a ‘highly escalating’ cost of living tapered with only one in five (20%) of polled executives anticipating higher prices in the next 12 months – a notable 22 percent drop from the previous month.
And only 16 percent now foresee a ‘moderate escalation’ in their expenses, which represents a notable 12 point decrease from September. Additionally, nearly three in 10 (29%) expect their spending to ‘decrease’ while 27 percent believe it will ‘stay the same.’
Forty-three percent of survey participants remain pessimistic, believing they ‘will not have a chance’ to purchase non-food items over the next 12 months – this however, marks a substantial 25 point fall from September.
And 26 percent of respondents expect living expenses to ‘stay the same,’ reflecting a nine point increase from the previous month. What’s more, a quarter (25%) are optimistic about their ability to afford non-food products.
