INFLATION hit a new five-year high of 5.5 per cent high year on year in June as a result of more hikes in fuel, electricity and bread, the Statistics Department announced yesterday.
Food went up 7.69 per cent since June 2007. Housing, water, electricity and gas rose 7.77 per cent, transport costs 7.39 per cent, and restaurants and hotels 9.15 per cent.
In June 2007 inflation was running at only 1.9 per cent.
In May this year inflation was 4.9 per cent, which itself was a five-year high as global food and fuel rises hit home.
The new figure comes only a day after Brussels announced that eurozone inflation for June would be 4.0 per cent, which is 1.5 per cent lower than the domestic Cyprus Consumer Price Index (CPI) but EU harmonised inflation rates for Cyprus will not be released until Friday.
Brussels said fuel and food hikes were responsible for eurozone inflation, which had doubled since last September, when it stood at 2.0 per cent. Record inflation levels were also recorded for June in Germany, Britain, Italy and Spain.
Commenting yesterday on the eurozone inflation rates, Finance Minister Charilaos Stavrakis said: “I believe it is evident that inflation is an international and European phenomenon. We have said from the start that it is not exclusively a Cypriot phenomenon.”
Stavrakis said spiralling inflation was due to external factors such as the increase in fuel and cereal prices worldwide.
However economist Stelios Platis disagreed, like many others who say profiteering in Cyprus also plays a role.
“It’s not just external factors,” he said. “If it was we would be in line with eurozone inflation,” he added, referring to the fact that in Cyprus inflation was at least one percentage point higher than the eurozone rate.
“The eurozone area is subject to the same external shocks but in Cyprus the effects seem to be worse. There are accusations, which I find justifiable, about (price) cartels, and the absence of an effective committee for the protection of competition shows the market is not operating efficiently and profiteering is very possible,” Platis added.
The Consumers’ Association said last month that there were 187 cases of alleged price cartels currently before the Protection of Competition Committee concerning such things as fuel, milk and doctors’ fees.
The latest round of price rises is bound to result in new calls to the government to help those hit hardest by inflation.
Platis said new wage figures showed that pay increases were 1.2 per cent below average inflation. “Salaries are not rising as fast as the price of goods,” he said.
