GOOD NEWS ON DUAL FRONTS

Cost of living perceptions are in line with the deflationary milieu

The PepperCube Cost of Living Index (CLI) declined in March, reversing the slight increase recorded in the previous month – it fell by a noteworthy four points, from 58.6 in February to 54.6 a month later.

Notably, the CLI stood at a staggering 91.9 at the same time last year.

Meanwhile, the Colombo Consumer Price Index (CCPI) continued to remain in deflationary territory, albeit with a tapering change from February: the CCPI registered a year on year deflation rate of -2.6 percent in March, which represents a reversal from the -4.2 percent recorded in the previous month.

Respondents’ perceptions have shifted somewhat from February. Fifty-eight percent believe the cost of living has ‘highly’ or ‘moderately escalated’ over the past 12 months, reflecting a six percent decrease from February’s findings.

In March, 27 percent of poll participants said that costs either ‘stayed the same’ or ‘decreased’ – that’s a five point increase compared to the previous month.

And expectations of a ‘highly escalating’ cost of living eased slightly with 18 percent of polled executives anticipating higher prices over the next 12 months – a two percent drop from February.

Meanwhile, 14 percent of respondents foresee a ‘moderate escalation’ in expenses, marking a four percentage point decline from February. Well over four in 10 (46%) anticipate their spending ‘will remain the same’ – up six points from the previous month’s findings.

Additionally, 17 percent believe the cost of living ‘will decrease’ over the next 12 months.

Roughly half (51%) of the survey population say they ‘will not have a chance’ to purchase non-food items in the next 12 months – an increase of two percentage points from the preceding month.

And 31 percent expect their spending to ‘remain the same,’ reflecting a two point decrease from February, while 14 percent remain optimistic about being 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.