Consumer confidence falls again amidst inflation increase

By: Staff Writer

Colombo (LNW): Consumer confidence fell again in October, continuing its slide from its peak in April 2023, according to the Institute for Health Policy (IHP) as per the latest update of its Consumer Confidence Indices, generated from its Sri Lanka Opinion Tracker Survey (SLOTS).

This sentiment of consumers was evident amidst the Headline inflation, as measured by the year-on-year (Y-o-Y) change in the Colombo Consumer Price Index (CCPI) increased to 1.5% in October 2023 from 1.3% in September 2023.

The Central Bank said this slight increase in the headline inflation is mostly in line with its projections envisaged in October 2023.

This is the second straight month that inflation has accelerated, albeit marginally. Since peaking in February 2023 at 50.60%, inflation was seen on steady and rapid disinflation path, reaching the current significantly moderated levels compared to a year ago.

CBSL said the food deflation (Y-o-Y) continued for the fourth consecutive month and remained unchanged at 5.2% in October 2023 compared to the previous month. Meanwhile, the non-food inflation (Y-o-Y) increased to 4.9% in October 2023 from 4.7% in September 2023.

“Inflation is expected to stabilise around the targeted level of 5% over the medium term, supported by appropriate policy measures and well-anchored inflation expectations.

Nevertheless, should there be any upward increases to administratively determined prices, tariffs or taxes by the Government, a transitory increase in inflation beyond the target is probable in the short term,” CBSL said.

IHP said all indices remain at pessimistic levels with the biggest decline in the Index of Current Conditions, which tracks current conditions, and which fell 5 points to 13 points.

The Index of Consumer Sentiment (ICS), the broadest measure of the public’s view of their personal economic status and the national economy, fell 3 points to 22 points in October.

The Index of Consumer Expectations (ICE), which tracks future perceptions fell 2 points to 28 points.

All IHP SLOTS consumer confidence indices range from zero to a potential maximum of 100, with levels below 50 indicating net pessimism.

The CCI estimates are based on 558 interviews conducted by telephone in October 2023 and 13,216 adults surveyed between Oct. 21 2021-Oct. 31 2023, with sample sizes varying between indices depending on response rates.

All estimates are adjusted to be representative of the national population, including gender, age, ethnicity, and income level.

The SLOTS platform tracks public opinion and wellbeing daily using a large national panel recruited by face-to-face interviews and other randomly dialled respondents, with numerous peer-reviewed scientific publications that use the data.