The rate of inflation in Cyprus slowed slightly in September, offering partial cover for the government’s decision to withdraw two support measures. However, the cost of basic household goods is increasing at a rate triple that of general inflation, driven primarily by food prices.
This trend began even before the zero VAT rate on food was withdrawn on October 1, a decision likely to bring further price increases in these items.
Notably, European Central Bank President Christine Lagarde has twice in recent days stated that she expects inflation to rise in Eurozone countries in the final months of 2024.
Consumers are voicing their discontent through various channels about the high prices of basic foodstuffs in supermarkets, particularly for vegetables and fruits in recent times.
As a result, purchases are being made with great hesitation and only for absolute necessities.
Data published yesterday by the Statistical Service show that the consumer price index fell to 0.7% from 1.5% in August and 4% in September 2023, reaching its lowest level since March 2021. However, the food price index rose 3.9% in September on an annual basis.
The difficulties faced by a large segment of the population are highlighted by the fact that food items absorb a significant portion of the disposable income of middle and poorer households.
The issue is not only that prices are increasing annually but also monthly, as shown by an analysis conducted by the Cyprus Consumers Association.
For example, potato prices in September, compared to August, rose by 23.30%, vegetables by 6.38%, fresh fruits by 2.99%, soft drinks by 1.90%, beer by 1.75%, beef by 1.15%, and lamb and goat meat by 1.32%.
On an annual basis, according to the Statistical Service data, even larger increases were seen, especially in food and other dietary items which had a zero VAT rate until the end of September: olive oil 61.3%, potatoes 57.7%, vegetables 17.6%, bread 1.6%, rice 1.6%, lamb and goat meat 8.5%, mineral water, soft drinks and juices 5.2%.
Prices decreased annually for baby food -1.6%, fresh low-fat milk -1.1%, and preserved milk -1.6%, while the price of fresh whole milk remained unchanged. The price of margarine and other vegetable oils decreased by -10.6% and poultry by -8.7%.
The price of electricity decreased by -2.8% on an annual basis, but consumers should be aware that from November 1, the graduated subsidy implemented by the Government will cease. The price of diesel and petrol fell by -13.5% and -11.9% respectively.
While the intensity of price increases in recent months is not as high as in the previous year, it is be noted that each additional increase, however small, adds to the previous ones, resulting in a significant overall burden for consumers.
