Cyprus is witnessing the highest inflation rate recorded in four decades, with May equalling the 9.1% registered in February 1982.
The highest inflation rate Cyprus endured was 10.8% in 1981.
The news comes as the European Union announced a new set of sanctions on Russia for invading Ukraine, including a ban on 90% of Russia’s oil exports, rubber-stamped by Brussels earlier this week.
According to the Cyprus Statistical Service, inflation jumped to 9.1% in May, from 8.8% in April and 7.13% in March.
The biggest price changes were in electricity (+40.9%), petroleum (+37%) and agricultural products (+10.9%).
May had the biggest monthly jump in fuel prices ever recorded, as they rose by 6%.
Compared to May 2021, the largest increases were observed in the categories of housing, water, electricity, and gas (22.3%), transport (20%) and food and non-alcoholic beverages (8.6%).
According to Eurostat data, the inflation rate in Cyprus for January-May stands at 7.4%.
To combat the ever-increasing cost of living, the government decided to extend lower VAT on electricity bills and a fuel price cap while boosting pensions to cushion the impact of runaway prices.
The government’s latest package, costing an estimated €103 mln, sees VAT on electric bills charged at a lower coefficient of 10% from the standard 19% until August 31 and a cap on tax on fuel at the pumps until the same date.
On Thursday, MPs were expected to pass a bill extending the reduction of the consumption tax on fuel introduced earlier this year.
Meanwhile, Cyprus’ GDP this year is expected to decelerate to 2.3% from the previous estimate of 3.6%, as inflation will more than double due to negative geopolitical developments associated with the war in Ukraine.