THE COST OF LIVING
THE CONSUMER COST CRUNCH
Consumer prices climb steadily as the Cost of Living index slips further
The PepperCube Cost of Living Index (CLI) declined for the third consecutive month, slipping to 60.2 in October – a 1.9 point drop from September’s 62.1. Despite the downward trend however, the change has brought little or no relief to consumers.
In contrast, the Colombo Consumer Price Index (CCPI) maintained its upward trajectory for the third consecutive month, following 11 months of deflation, recording a year-on-year rate of inflation of 2.1 percent – compared to 1.5 percent in September.
Respondents’ perceptions about the cost of living remain largely unchanged from the month prior. Seventy-five percent believe the cost of living has ‘highly’ or ‘moderately escalated’ over the past 12 months – a marginal movement of three points from September (78%).
Twenty-two percent of survey participants say that costs have either ‘stayed the same’ or ‘decreased,’ reflecting a three point rise from the preceding month.
Expectations of a ‘highly escalating’ cost of living continue to ease with 16 percent of polled executives anticipating higher prices over the next 12 months – down two percentage points from September.
Meanwhile, 29 percent expect a ‘moderate escalation’ in their expenses – unchanged from September – while nearly a third (32%) anticipate their spending ‘will remain the same,’ which is also consistent with the preceding month.
And 15 percent believe the cost of living ‘will decrease’ over the next 12 months – a one percent increase from the month prior.
When asked about their ability to purchase non-food items in the next 12 months, 45 percent say they ‘will not have a chance,’ which is one percentage point lower than September.
And well over three in 10 (34%) expect their spending to ‘remain the same’ (up 3%) while 15 percent (one point higher than in September) are 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.
