Lower import prices cut May inflation for Cyprus

Consumer price inflation inched down to 2.95% in May, from 3.08% in April, largely owing to lower imported goods prices.
The price of imported goods (excluding petroleum) was 0.2% lower in May than in the same month of 2011, whereas the price of locally produced products, rose by 8.1% compared with the year earlier.
This was largely as a result of soaring electricity prices.
Upward pressure on prices also came from petroleum products, which were 8% higher in May 2012 than in May 2011.
Services prices, on the other hand, rose by only 1.3% in the same period.
For the first five months of the year consumer price inflation rose by 3.1%. By product, the fastest-rising category was in “housing, water, electricity and gas”.
The state-owned Cyprus Electricity Authority slapped surcharges on electricity last year after a deadly explosion of confiscated Iranian armaments that had been left unexposed in the sun destroyed the main power station. Further EU-related increase were applied in early 2012.
Before the tariff increases, Cyprus had the third highest household electricity tariffs in the EU according to Eurostat data, beaten only by Denmark and Germany.
www.sapientaeconomics.com