Cuprus harmonised inflation falls to 2% in May

The EU-harmonised inflation rate as measured by the harmonised consumer price index (HICP) fell to 2.0% year on year in May, compared with 2.8% in April. On a month-on-month basis, HICP rose by just 0.2%.

For the period January-May 2005 the HICP recorded an increase of 2.5% compared to the corresponding period of 2004, compared with 2.6% in January-May 2004.

On a month-on-month basis the strongest rise was recorded for clothing and footwear, up by 1.2% compared with May. The index is now almost at the same level as in December 2004, before the January sales. Reports of cheap imports into the EU from China appear to be having little impact on the Cyprus market, therefore.

Prices of housing, electricity, water and gas, affected inter alia by oil prices, saw the second-fastest monthly rise, of 0.9% and are up 8.5% year on year.

Competition is at least continuing to have an impact on communications prices. These slipped 0.8% in May and were down by 11.0% compared with May 2004.