In the entire European Union, including Cyprus, there is a continuous de-escalation of inflation.
This gives the impression, also reinforced by statements from officials, that we have overcome inflation. The storm has passed. or so we would like to believe.
References like “the lowest point of inflation in the last three years” are likely to mislead some consumers.
Not to the extent that they believe we have returned to “normality,” but they might wonder whether they are correctly perceiving the (exact) reality or if something is amiss with the numbers and statements about those numbers.
Because when it’s said – and it’s true, based on data from the Statistical Service and Eurostat – that inflation this March “dropped” to 1.6% or 1.2% (respectively) compared to March 2023, there’s a nuance that shouldn’t be overlooked.
1.6% or 1.2% is still an increase in the consumer price index. We might all say “inflation dropped,” but it didn’t; it continued to rise, albeit at a slower rate than before.
It’s positive that the rate of price increases is decreasing, but it’s very concerning that very few products have reduced even a portion of the hikes imposed over the last four years.
That is, the years from the nearly zero inflation of 2020 (before the pandemic upheaval) until today.
And as yesterday’s data from the Statistical Service show, as presented comparatively in the Phileleftheros report on page 16, the overall inflation between March 2020 and March 2024 averaged at 14%. Food inflation reached 16%.
Yet, even these figures don’t show the whole picture.
Because the Statistical Service and Eurostat display official inflation based on products monitored from selected sales points at regular intervals.
Obviously, things are worse in the market for some products and services.
So, when the Government relies on pan-European and Cypriot data to tell us, like the Finance Minister recently did, that for instance, the fuel prices have decreased compared to a certain month in 2022, expecting perhaps our admiration, they should not overlook the fact, for example, that according to yesterday’s update from the Statistical Service, fuel prices from March ’20 to this year’s March had an average increase of 26% (for oil) and 21% for petrol.
Electricity rose by 36% over the entire four years on average, but segmentally, there were even higher increases annually.
And we’re not talking about short-lived hikes. These are the percentage increases consumers are still carrying on their backs today.
Therefore, when the Government’s economic team considers (and reconsiders) whether to provide some relief measures (a different discussion if they’re effective or not), they must factor in the burden placed on consumers. Especially those with lower incomes bear a heavier load.
Without recording wage increases worthy of note during the four-year period of consecutive crises, except for some employees in good positions and those who thankfully received Automatic Wage Indexation to limit the loss of their purchasing power.
The rest – a whole army of them – wonder if anything will ever change from the reality they are experiencing.
