Prices fell 1.5 % in December 2014 compared to respective month a year ago.

The 2014 deflation rate is the lowest inflation rate registered in the Republic of Cyprus since it became independent in 1960, Cystat said in a statement on its website today. The previous lowest rate was a -0.6% in 1961. Last year, prices fell 0.4%.

The value added tax rate rose from 18% to 19%, while the reduced rate rose from 8% to 9%. In addition, excise tax on fuel products increased by €0.05, as part of the revenue measures agreed with international creditors as part of Cyprus’s March 2013 bailout.

In December, prices for housing, water, electricity and gas fell 4.2% compared to a year ago Cystat said. Prices for transportation and food, including non-alcoholic beverages fell 2.4% and 2.3% respectively, while education dropped 1.7%. Prices for alcoholic beverages and tobacco rose 3.5% followed by telecommunication services, which became 1.8% more expensive.

In December, prices fell 1.6% compared to the month before, according to Cystat.

Source: Cyprus Mail