Deflation comes fast for Cyprus

The severe financial crisis that started with the Eurogroup meeting on 15th March appears to have led to almost immediate deflation in Cyprus, with the consumer price index dropping over the year earlier by 0.3% in April.
Compared with the previous month, prices fell by 0.5%.
The Statistical service said that this was mainly due to decreases in the prices of electricity, certain fresh vegetables, petroleum products and rents.
It is also known that coffee shops and bakeries slashed prices on popular items in an effort to retain customers.
For the first four months of the year the CPI rose by 1.0% compared with the corresponding period of 2012.
Deflation has come faster to Cyprus than Greece, which experienced its first deflation since 2008 only in April, according to EU-harmonised consumer price inflation data.
The EU-harmonised rate for Cyprus shows a small increase of 0.1% in April.
Other bailout countries such as Ireland and Portugal were several months into the crisis before they saw deflation.
www.sapientaeconomics.com