Cyprus inflation up by 1.9% Y/Y in July

Sales discounts offset oil price

Consumer price inflation rose slightly in July to record a 1.9% increase on the same period of 2004, compared with a rise of 1.7% in June.

Although oil prices are already affecting transport and household electricity prices, it appears that the summer sales offset most of the impact on the overall inflation rate.

For example, transport prices rose in July by 1.8% compared with the previous month, and by 3.1% compared with July 2004. Similarly, prices of housing, water, electricity and gas rose by a full 1% compared with the previous month and by 5.3% compared with July 2004.

However, offsetting this was a huge fall in prices of clothing and footwear: down 16.6% compared with the previous month and by 4.8% compared with the previous year, which suggests that retailers made bigger discounts in 2005 than they did in 2004.

Communications prices also continue to fall steeply, as the main telecoms provider CyTA battles it out with the regulators over its prices cuts. Communications prices in July were 9.6% lower than in July 2004.

Fiona Mullen