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Cyprus Inflation July 2023

Cyprus: Harmonized inflation falls to an over two-year low in July

Harmonized inflation fell to 2.4% in July, following June’s 2.8%. July’s reading marked the lowest inflation rate since June 2021. Looking at the details of the release, prices for food and non-alcoholic beverages rose at a softer pace in July, and housing and utilities prices fell at a faster pace. In contrast, prices for transportation declined at a slower rate.

Accordingly, the trend pointed down, with annual average harmonized inflation coming in at 6.2% in July (June: 6.9%). Meanwhile, consumer price inflation fell to 1.5% in July from June’s 1.9%.

Lastly, harmonized consumer prices rose 1.36% from the previous month in July, picking up from the 0.30% increase recorded in June. July’s jump marked the highest reading in a year.

Looking ahead, average inflation should continue moderating through end-2023 on tighter monetary policy and lower commodity prices year on year. Cooling domestic activity should also cap price growth. A stronger-than-expected economy and global energy price shocks given the country’s heavy dependence on oil pose upside risks to the outlook.

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