Is Cyprus woefully uncompetitive?

The EU-harmonised consumer price inflation rate in Cyprus recorded a drop of 0.8% in July, the same as the national consumer price inflation rate for July.
For the period January-July, the HICP rose by 0.4%.
However, the small overall rate disguises a vast difference among categories, and raises questions about whether Cyprus has suddenly become woefully uncompetitive.
While oil-related costs have come down, businesses have not adjusted their other prices accordingly.
For example, food-price inflation was up 7.3% over the year-earlier period in January to July, health prices were up 5.9% and education and restaurants hotels up 4.6%.
And all this in the middle of a nasty downturn in consumer spending. One wonders whether local businesses have a clue about supply and demand.
Only the prices over which Cypriot businesses have little control came down, namely transport costs (down 9.7%) and oil-related housing, water electricity and gas prices (down 8.2%).
Indeed, despite high oil prices, prices of food and non-alcoholic beverages have risen far faster than transport prices in the past two years, leaving the public to blame either the euro or the Christofias government for the high price rises.
Tourists have been complaining for years that prices have become too high. Now the locals are joining the chorus.