Cyprus inflation rises in Jan, new index

The national consumer price inflation rate rose to 2.25% in January, compared with January 2005, after rising by 1.99% in December.

Compared with the previous month, however, the CPI fell by 1.79%.

The Statistical Service attributes the decline to falls in the prices of certain clothing, footwear, household furnishings and household utensils owing to the January sales.

Increases were recorded in the prices of certain fresh vegetables, fresh lamb and petroleum products.

The Consumer Price Index from January 2006 has been revamped and has a new base of 2005 = 100. The composition has also changed.

Revisions to the index are based on the Family Budget Survey conducted in 2003, which shows how much households spend on every-day items.

Officials at the Statistical Service recommended the inclusion of more than 150 new items in the index, including Viagra, condoms, hair gel, depilatory wax and visits to orthopaedic surgeons.

The Financial Mirror understands that fuel prices have an extra weight in the index to reflect the proportion of household budgets spent on fuel.

Fuel prices primarily affect the categories of “housing, water electricity & gas” and “transport”. More than 95% of electricity is generated by oil in Cyprus.

Fiona Mullen