Cyprus retail sales slip in May

Retail sales volume slipped in May, rising by just 1.3% compared with the same month of 2004, after a strong increase of 12.3% in April. In terms of value, retail sales rose by just 0.5% year on year, compared with an 11.8% increase in April.

Seasonal reasons, such as Orthodox Easter that was celebrated on May 1, could explain the sharp slowdown in May. On a year-to-date basis, growth in retail sales volume in the first five months was a healthy 6.1%, compared with 3.3% for the whole of 2004.

However, data on consumer prices, showing that retailers slashed prices more this year than they did last year, also points to what a genuine slowdown.

This is perhaps related to the 2004-05 squeeze on salaries in the broad public sector.

The deceleration was recorded in a month in which interest rates were cut by half a percent (and by another half a percent in June). However, the cut came late in the month–on May 20–so was probably too late to have a positive impact on retail sales.

Fiona Mullen