Record Cyprus price rises in September

After a long lag, the impact of higher international oil prices seems to have taken its toll on consumer price inflation in Cyprus, as prices rose in September by 1.8% in the previous month–their fastest rise this year and the fastest monthly rate for two years.

Compared with the same month of 2004, inflation accelerated to 2.9% in September, having recorded 2.1% in August.

In the first nine months of the year, prices rose by 2.5% compared with the same period of 2004.

One of the main reasons for the sharp rise was a 3.6% increase in the heavily weighted category of foor and non-alcoholic beverages. On a month-on-month basis, thses rose by 1.7% in September.

Another important reason was the rising cost of oil-related items , such as housing, water electricity and gas, which rose by 1.8% month on month and 6.2% year on year, and transport, which rose by 1.9% month on month and 5.4% year on year.

In September the Ministry of Finance revised its forecast for inflation to 2.5-3.0% this year, owing to rising fuel prices, and shaved the GDP growth forecast to 3.3%.

Education inflation slower

The figures on education suggest that prices in this sector rose by less than last academic year. In September 2005 they rose by 3.5% on the previous month, whereas in September 2004 they rose by 4.3%.

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 September were 12.5% lower than in September 2004.

Fiona Mullen