Cyprus inflation drops by 1.6% in Jan despite electricity rise

Consumer prices fell by 1.6% compared with the previous month in January despite another increase in electricity tariffs, while the annual inflation fell to 3.1% compared with 3.9% in December.
The Statistical Service said that the fall was mainly owing to lower prices of clothing, footwear and household furnishing items, owing to the January sales.
There was a rise in the prices of electricity and petrol. The increase in electricity was reflected in a 1.1% monthly increase in the category of “housing, water, electricity and gas”. Compared with the year earlier, this category was 12% higher than in January 2011.
Electricity prices have risen sharply in recent months owing to tariff rises. Electricity prices rose by 1.5% in January as part of a phased three-year increase in tariffs. In September 2011, to pay for the higher cost of power generation after the Mari explosion that destroyed the Vassilikos power station, the Electricity Authority of Cyprus imposed a 6.96% surcharge until at least July 2012.
Electricity prices are also affected by the price of oil.
www.sapientaeconomics.com