Consumer goods prices in Cyprus continue to rise in July

Despite a slowdown in overall inflation, an exclusive report by Eurostat, shows how the price levels of various consumer goods and services have increased. In this article, we explore the factors behind this upward trend, illustrate the difficulties created by the inflationary increase, and provide insights into the economy's future.

The majority of consumer products and services showed a steady increase trend in price levels in July in Cyprus, indicating ongoing inflationary pressures. According to the most recent information provided by Eurostat, the European Union's statistical agency, the inflation rate in Cyprus was 2.4% in July, a marked decline from the extremely high 10.6% recorded in the same month the year prior.

Food costs were one noticeable item that helped fuel the inflationary upswing; they rose by 8.4% in July compared to the same month in 2022. Despite a minor dip from the 8.9% increase in June of this year, the 2023 July results were still much greater than those of the previous year.

Looking back to July 2022, we see that food prices experienced a notable 6.9% increase in that particular month, highlighting the ongoing inflationary pressure that consumers in the food sector are subjected to.

Positively, Cyprus's energy prices showed signs of reduction, reducing some of the burden on consumers. Compared to the 15.4% recorded in June, energy prices dropped to 14.1% in July of this year.

The annual inflation rate for the Euro area saw a little slowdown at the same period; it is predicted to be 5.3% in July 2023, down from the 5.5% recorded in the previous month.

The food, alcohol, and tobacco category is predicted to have the highest annual rate in July, hitting 10.8%, when the key factors affecting inflation in the euro area are taken into account. Nevertheless, this is a small improvement above the 11.6% observed in June. Services are anticipated to see an annual rate of 5.6% in July as opposed to 5.4% in June, closely behind that. The estimated annual rate for non-energy industrial products in July will be 5.0%, down from the 5.5% observed in June. Energy, meanwhile, is expected to continue in negative territory in July at -6.1%, which is a modest improvement from the -5.6% observed in June.

Despite Cyprus's declining inflation rate, consumers and policymakers are concerned about the ongoing increase in the cost of goods and services. To comprehend the fundamental causes of these price increases and determine their prospective effects on the economy and households in the upcoming months, the situation demands thorough observation.