Cyprus Mail
Business Cyprus

Inflation rate hits 2.5%, highest since August 2011

The Vassilikos power station

The annual inflation rate rose in August to 2.5 per cent — the highest in seven years — from 2.3 per cent the previous month, once more exposing Cyprus’s vulnerability to energy price hikes.

In the first eight months, the consumer price index rose an annual 0.9 per cent, the statistical service said on Thursday.

In August, the largest impact on inflation resulted from a 13 per cent increase in fuel prices followed by a 7.9 per cent increase in the price of fruit and vegetables, Cystat said. The third largest direct impact on inflation came from a 13 per cent increase in electricity prices.

The overall increase in prices last month was partly offset by a 0.7 per cent drop in the prices of industrial products and a 2.8 per cent reduction in the price of water, Cystat said.

The island, whose public transit system remains undeveloped and its inhabitants rely on the use of cars to move around, has repeatedly failed in the past decade to introduce natural gas to substitute the use of crude oil and diesel as fuel for its conventional power plants.

 

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