Inflation reached 6.8% in January

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The inflation rate dropped by 1.4 percentage points in January, compared to the previous month, as consumers were given a respite from hiking fuel prices.

According to the latest data released by the Cyprus Statistical Services, the Harmonised Index of Consumer Prices (HICP) rose 6.8% in January, compared to the same month last year, powered by housing and electricity increases and heating fuel.

Compared to January 2022, Housing, Water Supply, Electricity and LPG (18.0%) and Food and Non-Alcoholic Beverages (10.9%) presented the biggest changes.

Compared to December 2022, the biggest change was recorded in the Clothing and Footwear category, as prices dropped by 13.0%.

Compared to the previous month, energy costs have dropped by 3.3%, while non-energy industrial products are down by 3%.

The drop in the inflation rate in January comes after the island saw inflation reach 8.1% last year compared to 2021, driven by higher energy bills and pump prices.

Cyprus saw a record inflation rate in July when a 10.9% year-on-year increase was recorded.

The previous record was 10.8% in December 1981.

Inflation in the Eurozone

According to Eurostat data, Cyprus had one of the lowest annual inflation rates recorded in the European Union.

Luxembourg had the lowest (5.8%), followed by Spain (5.9%) and Cyprus and Malta (both 6.8%).

The highest rates were recorded in Hungary (26.2%), Latvia (21.4%) and the Czech Republic (19.1%).

According to the latest data, the biggest contributor to the eurozone’s annual inflation rate in 2022 was food, alcohol, and tobacco, whose prices rose by 2.94%, followed by energy at +2.17%, services at +1.8% and non-energy industrial goods at +1.73%.

Compared to December, annual inflation fell in 18 Member States and rose in nine.

Meanwhile, core inflation in Cyprus, which excludes products with highly volatile prices, such as food and energy, accelerated slightly.

Core inflation accelerated in January to 5.3% compared to the same month last year.