THE COST OF LIVING
COST CONCERNS REMAIN HIGH
Living costs remain high as inflation rises and spending expectations weaken
The PepperCube Cost of Living Index (CLI) dipped by 0.1 point to 73.3 in July, following three consecutive months of moving north. This marks a reversal of the gradual upward trend recorded from April to June, although the index continues to remain in the 70 points range.
Meanwhile, the Colombo Consumer Price Index (CCPI) maintained its uphill trajectory with year-on-year inflation rising by 0.5 percentage points to 7.3 percent in July. This is the highest level recorded since the last time inflation stood in double digits back in June 2023.
More than eight in 10 (82%) of those surveyed say the cost of living escalated ‘highly’ or ‘moderately’ over the past 12 months – down two percentage points from June (84%).
Fifteen percent believe that living costs have either ‘stayed the same’ or ‘decreased a little,’ compared with 14 percent in the previous month.
Looking ahead, three in 10 (30%) of polled executives expect the cost of living to ‘highly escalate’ over the next 12 months – up three percentage points from 27 percent in June.
And a further 37 percent anticipate a ‘moderate escalation’ in expenses – up one point from the preceding month – while slightly less than a quarter (23%) believe their spending ‘will remain the same’ (a 5% decline from June).
Only six percent expect the cost of living to ‘decrease’ over the next 12 months – up two percentage points from the previous month.
When asked about their ability to purchase non-food items in the next 12 months, 60 percent say they ‘will not have a chance’ – although this represents a four point decline from the month prior.
And a little over a quarter (27%) expect their spending on non-food items to ‘remain the same’ (up 2%) while only 10 percent are optimistic about their ability to afford such purchases – a three point increase from June.
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
