By Peter Stevenson
Cyprus recorded an annual rate of deflation in 2013 of -0.4 per cent for the first time in 50 years, according to data published yesterday by the Statistical Service.
In December 2013 deflation of -2.3 per cent was recorded, compared to -2.1 per cent in November 2013.
The Consumer Price Index (CPI) for December 2013 fell by 0.34 units or 0.29 per cent to 117.49 units compared to 117.83 in November 2013.
According to the Statistical Service, the cost of housing, water, electricity and gas went down by 3.99 per cent last year compared to the previous year. In 2013, the price of clothing and footwear went down by 2.73 per cent, health services by 2.5 per cent and furnishings, household equipment and supplies by 1.09 per cent compared to the previous year. The cost of education fell by 0.74 per cent and recreation and culture 0.11 per cent in 2013 compared to 2012.
This was in contrast to alcoholic beverages and tobacco, transport, communication, restaurants and hotels, food and non-alcoholic beverages and other goods and services which all rose in price in 2013 compared to 2012.
The price of alcoholic beverages and tobacco products went up by 8.58 per cent last year compared to the previous year. Transport costs went up by 2.21 per cent, communication costs rose by 0.97 per cent and miscellaneous goods and services went up by 0.86 per cent in 2013 compared to 2012.
The cost of going to a restaurant or hotel went up by 0.39 per cent while food and non-alcoholic beverages also increased in price by 0.22 per cent last year.
Despite the slight slide in prices, trend is unlikely to continue into 2014 given the slew of new taxes and increased contributions on the cards in the coming months.
One of the items that saw a steep decrease in price was electricity according to Cyprus Energy Regulatory Authority (CERA) chief George Shammas, who said yesterday prices had fallen 17.5 per cent.
Shammas met yesterday with President Nicos Anastasiades to hand over CERA’s annual report for 2012.
“We discussed the purchase of electricity, natural gas and renewable energy sources,” Shammas said following the meeting.
“There was a significant reduction in the price of electricity in 2013, part of it is to do with CERA’s actions and another to do with the reduction in the price of fuel,” he said.
The price reduction comes to 17.5 per cent for the average consumer, although it could be more for others, Shammas added.
Asked whether there could be more reductions in the price of electricity in 2014, CERA’s chief said if something like that were to happen, it would be announced and then immediately implemented.
Shammas said the President showed interest in the matters that CERA deals with and expressed his support for the regulator’s efforts to meet its goals.
“The annual report dealt with the subject of the energy crisis, something which CERA has been dealing with for almost two years now,” he said.
Shammas said the results of the regulator’s efforts were beginning to show now that the Vassilikos power station had returned to full working order. The plant was almost destroyed in the Mari naval base blast in July 2011.
“CERA is currently understaffed and over the last three years we have had an approved budget to fill position which are necessary for us to perform our duties,” he said.
Shammas added that the President expressed his support in the matter and that it is currently being monitored by the troika so a solution could be found.
There is currently a freeze on public sector hirings.
“New issues arose in 2013 concerning plans to implement net metering for renewable energy sources for households, and self-production systems for commercial and industrial consumer,” Shammas said adding that these issues were discussed with the President, who supports CERA’s efforts.