CONTRASTING INDICATORS

Opinions on the cost of living remain varied despite continued disinflation

The PepperCube Cost of Living Index (CLI) registered an uptick in December following seven months of continuous decline. Earlier in November, the index hit its lowest point since the fourth quarter of 2015.

The CLI increased by 1.2 points in December from the previous month (59.4) to 60.6.

In contrast, the Colombo Consumer Price Index (CCPI) recorded disinflation once again with the index standing at -1.7 percent year-on-year in December – compared to -2.1 percent in the preceding month.

Respondents’ perceptions have largely remained unchanged as in the previous month. Eighty-four percent believe the cost of living has ‘highly’ or ‘moderately escalated’ over the past 12 months – a three percent decrease from November’s findings.

Meanwhile, 15 percent of the sample group feel that costs either ‘stayed the same’ or ‘decreased’ in December, which is a three percent rise from the previous month.

In December, expectations of a ‘highly escalating’ cost of living remained in line with the preceding month with 16 percent of polled executives anticipating higher prices over the next 12 months – a slight (1%) spike from the month prior.

And 19 percent of respondents anticipate a ‘moderate escalation’ in their expenses, also up one point from November. Additionally, nearly four in 10 (38%) expect their spending ‘to remain the same’ – rising from 35 percent in the preceding month.

Meanwhile, 19 percent believe the cost of living ‘will decrease’ in the next 12 months.

Despite the mixed expectations, nearly half (48%) of the survey participants believe they ‘will not have a chance’ to purchase non-food items over the next 12 months.

Furthermore, 27 percent expect their expenditure to ‘stay the same,’ reflecting a three percentage point decrease from the previous month. And nearly two in 10 (18%) are optimistic about their ability to afford to buy 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.