One of the key reasons for deflation in the recent period has been low international oil prices which affect electricity and petrol costs.

The prices of housing, water, electricity and gas fell by 9.5% year on year in September, while transport prices dropped by 5.4%.

In September prices increased slightly compared with the previous month, rising by 0.5% owing to increases in some clothing and footwear items, fresh fruits and vegetables. The Statistical Service Cystat said electricity prices also rose compared with the previous month.

Drops in prices compared with the previous month were recorded in petrol and airfares.

For the first nine months of the year deflation of 2.1% was recorded.

Long-term deflation is considered bad for an economy, as it raises the burden of debt on both households and the government.

Source: InCyprus