THE COST OF LIVING
LIVING COSTS DICHOTOMY!
The Cost of Living Index falls sharply while inflation replaces deflation!
The PepperCube Cost of Living Index (CLI) fell sharply to 64.9 in August – down five points from July’s 69.9 – bringing some respite to the fragile consumer sentiment amid shifts in key cost drivers.
In contrast, the Colombo Consumer Price Index (CCPI) broke its 11 month deflationary run, recording a year-on-year rate of inflation of 1.2 percent in August compared to -0.3 percent in the previous month.
Respondents’ perceptions about the cost of living remained relatively negative compared to the month prior. Seventy-eight percent believe the cost of living has ‘highly’ or ‘moderately escalated’ over the past 12 months – a decline of seven percentage points from July’s findings.
In August, 16 percent of survey participants said that costs either ‘stayed the same’ or ‘decreased,’ reflecting a three point drop from the preceding month.
And expectations of a ‘highly escalating’ cost of living eased with 24 percent of polled executives anticipating higher prices over the next 12 months – this represents an 11 percentage point decline from July.
Twenty-one percent of respondents expect a ‘moderate escalation’ in their expenses – up one point from the month prior. And slightly over a quarter (27%) anticipate their spending ‘will remain the same,’ which is a negligible one point increase from July.
Additionally, 17 percent believe the cost of living ‘will decrease’ over the next 12 months – a shift recorded after three consecutive months of only 12 percent of polled executives sharing this view.
A little over half (52%) of the survey population say they ‘will not have a chance’ to purchase non-food items in the next 12 months, signalling a decrease of five percentage points.
And just over a quarter (27%) expect their spending to ‘remain the same,’ reflecting a three point drop, while 16 percent are optimistic about being able to afford non-food products – that’s two points higher than in July.
– 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.
