Cyprus inflation shows mild euro effect in January

But annual inflation is high at 4.3%

 

The first inflation rate published after Cyprus adopted the euro shows that there was only a mild euro effect if prices are compared with the previous month but the annual consumer price inflation rate was high compared with the same period of 2007.

Prices in January 2008 showed their usual seasonal fall as a result of the sales period, dropping by 1.38% compared with December. However, prices did not fall as fast as they had in January 2007 (1.78%), January 2006 (1.79%) and January 2005 (2.21%).

One of the reasons for the fairly mild monthly fall was a steep drop in the prices of clothing and footwear, which fell by 21.59% compared with December 2007. This was also a slightly larger fall than in January 2007, when clothing and footwear prices fell by 20.58%.

On the other hand, food prices rose by 1.90% over the previous month, which is higher than the rate recorded in January 2007 (1.30%) and January 2006 (1.65%).

High food-price inflation both in Cyprus and abroad is one of the key factors that has pushed up the annual inflation rate in recent months.

Compared with the same month of 2007, prices rose in January 2008 by 4.34%. This is the highest annual rate recorded since mid-2003.

 

Fiona Mullen