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Cyprus sees prices plunge in August as consumer behaviour changes

Shopping spend is more careful these days

Prices of transport, housing, water, gas electricity and other fuels all plunged in August, bringing the index of harmonised inflation down 2.9 per cent from the same period in 2019, according to data released on Thursday by the Cyprus Statistical Service (Cystat).

A study by Cyprus Profile shows that a large segment of consumers seek to relieve uncertainty in the pandemic by careful spending. About 60 per cent of consumers surveyed are seeking value for money above all in making choices for purchases.

Prices in energy are down 14.8 per cent from the previous year.

Prices have declined steadily in Cyprus since April of this year, when the index dropped 1.2 per cent with respect to the same month in 2019. In May the index was down 1.4 per cent year-on-year, and then 2.2 per cent in June.

The economic slowdown in the wake of the pandemic undoubtedly accounts for the relative lack of activity, but it is accompanied by consumers deferring purchases due to uncertainty, as PwC notes in its “Restart Cyprus” study.

On a month-to-month basis, however, the HICP was flat, with an 0.8 per cent increase.

Several studies indicate that a large segment consumers in Cyprus are making sharp changes in their spending, taking greater care, and while this is not new in consumer behaviour, the scope and scale is greater than ever.

The harmonized Index of Consumer Prices (HICP) is a composite measure of inflation in the Eurozone. The HICP takes in consumer price inflation data from each member nation of the ECB and weights them accordingly into an index.

For the period January – August 2020 the HICP recorded a decrease of 1 per cent compared with the corresponding period of the previous year, Cystat said.



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