Cyprus edges towards deflation

Cyprus’ annual harmonized inflation in August marked a significant decline, showing deflationist tendencies due to the continuing economic downturn.

According to figures released today by Eurostat, Cyprus’ Harmonised Index of Consumer Prices (HICP) declined to 0,1% from 0.7% in July and compared to 4.5% in August 2012. Greece`s deflationist tendencies eased to 0.1% in August from 0,5% in July.

The Euro area average annual harmonized inflation declined to 1.3% in August from 1.6% in July whereas the HICP in the European Union declined to 1.5% from 1.7% in July.

The euro area member-states with the lowest inflation in August was Greece with 1.0%, Ireland 0,0% and Cyprus with 0,1%. All three countries are under a financial adjustment programme drafted by the Troika of European Commission, the European Central Bank and the IMF. Estonia with 3.6%, the Netherlands with 2.8% and Slovenia with 2.2% were the Euro area member-states with the highest inflation rates.