Cyprus Experiences Notable Inflation Slowdown
The Mediterranean island of Cyprus has reported a marked slowdown in inflation, with figures reaching a comforting low not seen in the past three years. According to the latest data from the Cyprus Statistical Service (Cystat), the inflation rate for March 2024 was just 1.2 per cent year-on-year, a significant deceleration that can be attributed to lower electricity and petroleum prices.
After peaking at 3.47 per cent last October, inflation rates have remained subdued, staying below the 2 per cent threshold. This trend follows the government’s initiative to reduce fuel prices last November, a measure that remained in effect until the end of March 2024. The Consumer Price Index (CPI) for the first quarter of the year also saw an uptick of 1.6 per cent compared to the same period in 2023.
On a month-to-month basis, the CPI witnessed a rise of 0.48 points in March, signaling a steady but controlled increase in consumer prices. The most notable yearly increase within specific categories was seen in Restaurants and Hotels, which jumped by 5.9 per cent when comparing March 2024 to March 2023. Clothing and Footwear also saw a significant monthly change, with a 5.8 per cent rise from February to March 2024.
When examining the period from January to March 2024 against the same timeframe in the previous year, Restaurants and Hotels, along with Other Goods and Services, experienced the most pronounced changes. These categories have also been identified as having the most positive impact on the CPI change year-on-year.
Conversely, Food Services and Electricity were highlighted as having contrasting impacts on the inflation rate, with Food Services contributing positively and Electricity registering a negative influence on the CPI. In terms of monthly variations, Clothing stood out as having the most substantial impact on the CPI change from February to March 2024.
The latest figures suggest a cautiously optimistic economic outlook for Cyprus, as businesses and consumers alike welcome the relief brought by slowing inflation. This could potentially lead to increased spending power and consumer confidence as the island nation continues to navigate through its economic landscape.
