THE COST OF LIVING
The PepperCube Cost of Living Index (CLI) shot up in May, rising by 3.1 points from 66.8 in April to 69.9. This increase marks a return to the upward trend that emerged briefly in March – the only month since September 2024 in which the index moved into the 70 point range.
At the same time, the Colombo Consumer Price Index (CCPI) continues to trend upwards with year-on-year inflation inching up to 5.5 percent in May – an increase of 0.1 percentage point.
SPENDING POWER UNDER STRAIN
The two cost of living indicators rise in tandem as external pressures mount
Meanwhile, slightly over eight in 10 (81%) of those surveyed say the cost of living escalated ‘highly’ or ‘moderately’ over the past 12 months – a four percentage point increase from April (77%).
And 16 percent believe that living costs have either ‘stayed the same’ or ‘decreased a little’ – down four points from the previous month (20%).
Expectations of a ‘highly escalating’ cost of living also edged up with 29 percent of polled executives anticipating higher prices over the next 12 months. This represents a two percentage point increase from April (27%).
Another 34 percent expect a ‘moderate escalation’ in expenses, reflecting a three point decline from the preceding month, while a quarter (25%) believe their spending ‘will remain the same’ – a fall of three points.
And only seven percent feel the cost of living will ‘decrease’ over the next 12 months – down three percentage points from April.
When asked about their ability to purchase non-food items in the next 12 months, 56% percent say they ‘will not have a chance’ – that’s a marginal one point increase from the month prior.
And nearly a third (31%) expect their spending on non-food items to ‘remain the same’ (up 6%) while only 10 percent remain optimistic about their ability to afford such purchases – which represents a six point decline from April.
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.
– LMD
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