Price increases have brought Cypriot consumers to their knees says union (Updated)

The government should take measures to relieve low-income households hit by inflation, Peo trade union said while the consumer protection service said prices last month showed a drop in the inflation rate.

Increases in the prices of essentials and energy, combined with increases in interest rates are eroding living standards of consumers, the labour union said in its statement marking the World Consumer Day.

According to the findings of a global survey published recently, due to the increased cost of living, consumers are forced to cut back on basic spending.

In Cyprus, increases in the prices of basic goods and services have brought households to their knees, Peo said.

“Consumers and workers, who have already paid a heavy price for the anti-labour neoliberal policies implemented for a decade, are now facing the consequences created by the pandemic and the war in Ukraine, with the result that their living standards and incomes are being eroded even further by the unprecedented wave of price rises and high inflation,” Peo said.

The continuous increases in key interest rates have further aggravated the situation, it added, as loan repayments are rising dramatically, while at the same time creating serious risks of an increase in non-performing loans.

Skyrocketing rents, severe borrowing difficulties, huge increases in the real estate sector and the absence of social housing schemes make it increasingly difficult, if not impossible, for the low and middle classes, especially young couples, to obtain affordable and decent housing, the statement added.

“The government must create a safety net for society and consumers who are suffering by immediately implementing a comprehensive package of measures to provide relief to low-income groups and vulnerable households and to halt the erosion of incomes,” Peo declared.

But the consumer protection service published its updated consumer goods price observatory for February which surveyed the weighted average price for 250 consumer staples available in 400 retail stores all over Cyprus throughout the month.

According to the report, 25 item categories recorded decreases in price while 10 categories recorded marginal increases of 1-2 per cent.

The exception were gas cylinders, and vegetables, which recorded more significant price increases due to the weather conditions and the increased demand on Green Monday

The remaining prices were limited to negligible increases of less than 1 per cent.

The service concluded that the prices recorded in the February report showed restraint, which reflects a continuous downward trend in the inflation rate.

Peo called for the full reinstatement of the cost-of-living allowance (CoLA) and its extension to all workers as a mechanism to effectively restore the market value of wages, measures to support low-income pensioners, such as including them for as long as fuel increases continue in the special electricity tariff, and the granting of a one-time emergency grant to provide relief from ongoing price increases.

A review of housing policy by broadening the criteria to cover a larger part of society is also among Peo’s proposals.

The union also called for an end to the double taxation on fuel, a reduction in VAT and a cap on essentials and continuous market control by the mechanisms of the energy ministry and in particular the consumer protection service to protect consumers from tax evasion.

In its announcement marking the World Consumer Day, the consumer protection service referred to the promotion of a legislative framework and other measures taken throughout the year to empower and protect Cypriot buyers.

The prices of basic consumer products will be available through a new digital tool while the service will step up training for businesses to ensure their compliance with the legislation.

This year’s World Consumer Day, “calls for vigilance and targeted action on the additional actions and measures we all need to take as consumers to emerge from this situation stronger and better prepared,” the service added.