Cyprus harmonised inflation slows in June

The Cyprus Harmonised Index of Consumer Prices (HICP) during June 2005 recorded an increase of 1.5% compared to the corresponding month of June 2004, compared with around 2.5% in the EU25. This marked a slowdown from May, when prices rose by 2%, and from June 2004, when the annual rate of change was 2.4%.

For the period January-June 2005 the HICP recorded an increase of 2.3% compared to the corresponding period of 2004.

The 12-month average rate of change July 2004-June 2005 compared to the index of July 2003-June 2004 was 2.5%.

The main reason for the fall in the inflation rate was a fall in the prices of food, beverages and tobacco. These are heavily weighted in the index, accounting for more than 19% of the total.

The fastest rising category, meanwhile, was prices of housing, water, electricity and gas, up by 7.1% compared with June 2003. This is no doubt related to the rising cost of electricity, most of which is generated by oil.

The second-fastest rising category was education, up 5.6% compared with the same month of 2004 as a result of prices rises that took effect at the beginning of the 2004/05 academic year.

Communications prices fell again, by 3.2% compared with the same period of the previous year. However, this was a smaller drop than in previous months because of action by the regulatory authorities over the proposed price-cuts of the dominant telecoms provider, CyTA.

Fiona Mullen