THE COST OF LIVING
RELIEF FROM COST PRESSURES
Key indicators point to an easing of the cost of living – for the time being
The PepperCube Cost of Living Index (CLI) declined in December, reversing course after climbing for three consecutive months, to 59.8 – a six month low. The index fell by 3.1 points from November’s 62.9.
In contrast, the Colombo Consumer Price Index (CCPI) remained unchanged, recording a year-on-year rate of inflation of 2.1 percent for the third consecutive month.
Respondents’ perceptions about the cost of living eased somewhat compared to the month prior. Sixty-nine percent of those surveyed believe that the cost of living has ‘highly’ or ‘moderately escalated’ over the past 12 months – a nine point decline from November (78%).
Twenty-eight percent of survey participants say that costs have either ‘stayed the same’ or ‘decreased,’ representing an eight point increase from the preceding month.
Expectations of a ‘highly escalating’ cost of living remained steady with 19 percent of polled executives anticipating higher prices over the next 12 months – up one percentage point from November.
At the same time, 29 percent expect a ‘moderate escalation’ in their expenses – marking a three point decline from the previous month – while over a third (35%) believe their spending ‘will remain the same,’ reflecting a two point increase.
Only 12 percent feel that the cost of living ‘will decrease’ over the next 12 months – a figure that remains unchanged from November.
When asked about their ability to purchase non-food items in the next 12 months, 51 percent of respondents said they ‘will not have a chance,’ mirroring the outcome in the prior month.
And slightly over three in 10 (32%) expect their spending on non-food items to ‘remain the same’ (up 2%) while 13 percent (three points lower than in November) remain optimistic about their ability to afford such purchases.
– LMD
