consumer price index CPI

Euro remains vulnerable after ECB keeps rates steady

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Euro remains vulnerable after ECB keeps rates steady

The European Central Bank (ECB) decided to hold its Main Refinancing Operations Rate steady at 4.5% to maintain downward pressure on consumer price inflation. ECB President Christine Lagarde warned of a weak economy with risks to growth tilted to the downside. The strong US Dollar is also contributing to the weakness in the EURUSD pair. The Dollar Index (DXY) is near a four-month high, and market expectations for Federal Reserve rate cuts have been pushed back due to strong US consumer price inflation and core Producer Price Index data.

Cypriots still grappling with inflation woes

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Cypriots still grappling with inflation woes

– Inflation rate in Cyprus dropped to 1.2% in March 2024, down from 1.8% in February and 5.8% in March 2023.
– The cost of living in Cyprus is 14% higher than it was four years ago when the COVID pandemic began.
– Food prices in Cyprus have seen significant increases, with olive oil doubling in price and sugar spiking by 59.2%.
– Prices of staple food items like bread, rice, dairy products, and eggs have also risen over the four-year period.
– Prices of agricultural products, fuel, and electricity have also increased in Cyprus over the same period.

Soft CPI weakens Swiss Franc

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Soft CPI weakens Swiss Franc

The Swiss Franc strengthened as softer-than-expected Consumer Price Index (CPI) data for March boosted expectations of one more interest rate cut by the Swiss National Bank.

No fuel to run the economy

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No fuel to run the economy

Inflation in Cyprus was reported to be lower than expected and below the Eurozone target average of 2%. Despite this, the real economy is facing challenges with small to medium-sized enterprises closing almost daily due to rising electricity costs and fuel prices, which are expected to increase further due to a rise in world crude prices. Small businesses are also burdened by local fees and taxes. The consumers’ association criticized the Energy Ministry for a lack of transparency regarding the formula for determining fuel prices at the pump, suggesting that more openness could have reduced fuel prices by about 3-4 cents a litre during October to December. Additionally, the price of olive oil increased by 54% over the past year, with a further 3.4% increase in February. Some goods and services have helped keep the consumer price index in check, but prices in several sectors continue to rise due to a lack of healthy competition in the Cyprus economy. The “photovoltaics for all” scheme has been criticized for not adequately supporting households unable to invest in lower-energy appliances. The current administration has been reluctant to introduce more support measures for vulnerable people, aiming to maintain a sound fiscal policy.

Cyprus inflation up 1.8% in February

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Cyprus inflation up 1.8% in February

The monthly Cyprus consumer price index (CPI) increased by 1.03 points to 114.93 in February, from 113.90 in January. The inflation rate rose by 1.8% from February last year. The CPI rate was up 0.9% from January and 1.75% higher for January-February compared to the same period last year. The largest change from February 2023 was in services (+3.7%), with the largest monthly change in agricultural goods (+5.6%) and the largest change compared to February 2023 in restaurants and hotels (+6.2%). The largest changes from January in the CPI for February were in clothing and footwear (+3.1%) and in food and non-alcoholic beverages (+2.7%). For January–February, compared to the same period last year, the largest changes were in restaurants and hotels (5.9%) and miscellaneous goods and services (3.7%). Year-on-year, February saw the biggest increases in restaurants and hotels (0.62) and food and non-alcoholic beverages (0.43). Catering services (0.60) had the most notable effect on the change of the February CPI compared to the same month last year, while the price of fresh vegetables (0.38) had the largest effect on the change of the February CPI compared to January this year. The CPI calculation includes a weight distribution for the four districts: Nicosia 42%, Limassol 30%, Larnaca 18%, and Paphos 10%. Prices of 805 goods and services are recorded monthly, except for some seasonal products, meat, and fuels, whose prices are collected weekly.