Cyprus inflation feels the oil effect

The Cyprus EU-harmonised inflation rate climbed for the third month in a row in October, reaching 2.2% compared with October 2004. Compared with September 2005, prices rose by 1.1%.

The fastest rising category was that of housing, water, electricity and gas, which is affected by high international oil prices.

Around 98% of Cyprus’ electricity generation comes from oil.

Prices of transport also rose faster than average, by 4.9% year on year. This hits consumers directly, as public transport in Cyprus is virtually non-existent, used only by those on very low incomes.

A number of categories recorded deflation, however: alcohol and tobacco (-1.2% year on year), clothing and footwear (-4.3%), health (-1.5%), communications (-9.1%), and recreation and culture (-1.5%).