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12° Nicosia,
29 May, 2024
 

High prices continue to plague the market

In three years, the cost of living has skyrocketed, while the prices of goods and services continue to remain high

Maria Eracleous

Maria Eracleous

Several goods and services are expected to stabilize at high prices in the coming period, while food prices are expected to rise ahead of Easter. These are the conclusions drawn from data from the Consumer Price Index for the first two months of 2023, as well as reports from market professionals to "K."

It is possible that the same dish on a restaurant menu will cost more by the end of the month, while the Easter table will cost more due to expected increases in meat prices. A tool in the hands of the consumer will be the application promoted by the Consumer Protection Agency, but it is not expected to be implemented before next October.

New price increases for lamb and veal are on the way in the run-up to Easter. According to Mr. Livadiotis, the issue of sufficiency is also unresolved.

Increases over three years

The Price Index data provides a more accurate picture of the rise in the cost of living over the last three years. As a result, bread is 22.4% more expensive this year compared to February 2020 and 12.8% more expensive compared to 2022. Rice has increased by 15%, while pasta has increased by 25%. Beef and veal prices have risen by 28.6% since 2020, and by 25% since last year. Less noticeable is the increase in pork, which is up 14% from 2020 and 18% from the same period last year, while lamb is up 24% from 2020 and 26% from the same period last year.  The increase for seafood over three years is 12.3% (but down about 6% from last year) and 23% for fresh fish (13% from last year). Around 20% more expensive milk and around 13% more expensive compared to February last year. Eggs are up 32% in three years and 13.5% year on year, while olive oil is up 16%, coffee is up 21%, and baby food is up about 16%. The picture is bleaker for fruits and vegetables, which show a decrease compared to the same period in 2020 - a 2% increase in fresh fruit, a 9% decrease in fresh vegetable prices, and a -6% decrease in potato prices.  Mineral and spring water costs 17% more, juices 14% more, and soft drinks 13.7% more. The price of beer remained constant, while the price difference for wine was insignificant.

Increases are on the way

Prices will rise further. Kostas Livadiotis, president of the Pancyprian Association of Butchers, said to "K," conveying messages from suppliers. As long as the factors that drive up prices are not addressed, the trend in pork, lamb, and beef is upward, he said, adding that with Easter approaching, it is not ruled out that there will be a supply shortage in the market due to various production issues. He reserved the right to provide more specific information in the coming days.

Chickens and eggs are stable

In contrast, chicken prices are expected to remain stable. Petros Mintikkis, president of the Poultry Farmers Association, told "K" that consumers are unlikely to see further increases in poultry prices because of costs of production and transportation of raw materials (bird feed, which accounts for 60-70% of the cost) have stabilized. It is also assumed that there will be no reductions.  

In the case of eggs, prices have risen significantly as a result of both the avian flu outbreak in Europe and the cost of chicks imported and reared in Cyprus for egg production. Costs, in particular, increased by 32%. However, even in this case, Mr. Mintikkis estimates that we have reached the ceiling and that no new increases are expected, but rather a price stabilization in the coming months, with the possibility of a price decrease in a longer-term scenario with many conditions.

Food, fast food and drink

From the above, but also from specific data from the Statistical Office, restaurants, cafes and bars are also participating in the dance of increases. So it now costs more to go out for either food or drink, and the option of ordering takeaway food has also increased significantly compared to the pre-pandemic and pre-war era. Restaurants, cafes and coffee shops have priced the options on their menus up by +13%, while increases have also been recorded in nightclubs. The biggest increase is recorded in fast food and takeaway food services, estimated at +17.6%. It is not excluded, said Fanos Leventis, president of the Pancyprian Association of Leisure Centres, that there will be a new upward revision of prices, explaining, however, that this is not a coordinated decision of the industry, but a decision of each business individually. It is a fact that after the economic blow of the pandemic, the companies in the sector tried to increase occupancy rates, holding back costs so that they would not be passed on to the consumer. This element remains in the equation, Leventis said. He added, however, that at present, reductions are not sustainable for businesses, and unless there is a drastic reduction in energy costs, possibly some prices may occasionally be revised upwards. In relation to energy costs, the Association is going to request a meeting with the Minister of Energy to discuss the use of renewable energy by leisure centers, as many difficulties are being identified in the utilization of these projects by businesses.

Holidays

Hotel stays are also about 9% more expensive than in 2020. Hoteliers have repeatedly stated that they lowered their prices during the pandemic period, which is reflected in the price index. In particular, the decline in 2021 was around 5.6% (comparison is for the first two months of the year) and 5% in 2022. Based on the data, there is an increase of 11.5% from this February to last February. It is also expected that prices will rise during the summer months.

Price app to be ready by Autumn

There has already been talk of the Consumer Protection Service's initiative to create an application that will provide consumers with a better overview of prices for products in supermarkets and bakeries. As "K" is informed, the issue is before the legal service for a legislative review. In a statement, the head of the service, Konstantinos Karagiorgis, said that by next week it is expected that the legislative-technical check will be completed, and then it will be passed by the Cabinet. "We intend before Easter to submit it to Parliament, as was the initial commitment of the minister," he said. If it gets the go-ahead from the plenary, then the ministry will go ahead with tenders to create the application. The goal is - in any case - after April to be implemented within six months, i.e. by Autumn (October-November) 2023. It is certainly not expected that the tool will solve the problem of accuracy, but it will help in terms of price transparency and the possibility for consumers to be better informed about prices on the market at an overall level so that they can make the choices they deem most advantageous.

Car maintenance is moving toward stabilization

Costs for parts and spare parts have risen by around 18%, with fuel costs up to 25% higher.  Marginal increases are not expected to have a significant impact on the current cost of car parts and by extension the cost of car maintenance, in the coming period. Speaking to "K", Konstantinos Kapodistrias, Ceo of Chr. Kapodistrias & Sons, explained that in April suppliers are preparing to announce new increases, although it is expected that they will be marginal and will reach the consumer around 2-3%, while he expressed the assessment that in the coming months, prices are headed towards stabilization.

However, car maintenance costs had recorded an increase compared to last year, around 11.6%. On a three-year level, an increase of around 18% was recorded for the parts and spare parts category, specifically, +18.7% for tires and +17% for car parts. At the same time, of course, motor fuels are also becoming more expensive -increased by 24.8% in the cost of petrol compared to February 2020, and 16% in the price of petrol. Also, current car buyers should be aware that the price has increased by 21.7% in February 2023 compared to February 2020, with the price trend being upward for both new and used vehicles. For new cars, the increase was 21.2% over three years. In February 2021 it was up 4% compared to the same month in 2020. At 10.7% it was up 10.7% in February 2022, and in one-year costs increased by 10%. 22.5% is the corresponding increase for used cars, with prices in this category remaining roughly the same in 2020 and 2021. Around the beginning of 2022, the increase was at 7.7%, while between 2022 and February 2023 the cost of buying a used car increased by 13.7%.

[This article first appeared in Kathimerini's 'Oikonomiki' printed edition and was translated from its Greek original]

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Cyprus  |  economy  |  inflation

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