CYPRUS: Inflation is back, but deflation pressures continue

Cyprus recorded its first rate of inflation in 24 months in December. The Harmonised Price Index (HICP) for December increased by 0.1%, compared to December 2015, while for the 12-month period between January and December, the HICP dropped 1.2% from a year earlier.

 
The HICP for December, compared to November, increased by 0.3%.
Compared to December 2015, the category with the biggest positive change was housing, water, electricity, gas and other fuels (1.8%), whereas the category with the greatest decrease was transport (-1.9%).
For the whole of 2016, compared to the corresponding period of the previous year, the largest negative changes were in transport (-7.5%) and housing, water, electricity, gas and other fuels (-6.6%). On the other hand, positive change was recorded in health (1.1%).
As regards to the economic origin, the largest change as compared both to the index of December 2015 and to the index of the previous month was in energy with an increase of 3.0% and 1.9%, respectively.
Last week, Cystat reported that the rate of inflation declined to -0.3% year on year in December remaining in negative territory for the 42nd consecutive month.
For the January to December period, inflation also decreased by 1.4% compared to the corresponding period of the previous year, CyStat added.
Negative inflation was mainly affected by the reduction in energy prices that dropped by 4.1%, compared with December 2015.
Compared with November, the Consumer Price Index for December increased by 0.45 units to 99.61 units from 99.16, mainly due to agricultural goods prices that recorded an increase of 5.7%.