Producer prices (factory prices) in the Cyprus industry increased twice as much as the producer prices in the EU25 in April, which made the island’s products less competitive than the European.
According to CYSTAT and Eurostat data, the prices of the Cyprus products (row materials, intermediary and ready goods) showed an increase of 3.4% in April 2004 compared to the corresponding period of 2003, while European industrial products increased by 1.7% against April 2003. The variation rate of the producer price index for EU15 stood at 1.6% in April, while for the eurozone at 1.4%.
The largest increase was recorded in Latvia and Slovenia with 6.9% and 4.1% respectively, followed by Cyprus and the Czech Republic with 3.7%. On the other hand, the producer price index of Finland and Ireland dropped 0.6%, followed by Lithuania and Germany that showed an increase of 0.7% and 0.95 respectively.
In Cyprus, the producer price index for Quarries and Mines recorded the largest increase of 8.5%, followed by the manufacturing index with 4.6%. The index for Power Supply, Water and Natural Gas fell 6.8%.
OEB: Impacts from harmonization cost
The increase in the producer prices is largely attributable to the increase in the production cost as a result of the EU harmonization. This occurred in the second half of 2003, when there were investments in production, OEB Deputy General Manager, Costas Christofides told StockWatch. “The fact that the variation of the producer price index is higher than the rest of the EU has affected negatively the island’s competitiveness. The Cost of Living Adjustment forces producers to transfer the increased production cost to the consumer. What is comforting, however, is the fact that the quality of the Cyprus products has been upgraded”, Mr. Christofides concluded.
According to CYSTAT and Eurostat data, the prices of the Cyprus products (row materials, intermediary and ready goods) showed an increase of 3.4% in April 2004 compared to the corresponding period of 2003, while European industrial products increased by 1.7% against April 2003. The variation rate of the producer price index for EU15 stood at 1.6% in April, while for the eurozone at 1.4%.
The largest increase was recorded in Latvia and Slovenia with 6.9% and 4.1% respectively, followed by Cyprus and the Czech Republic with 3.7%. On the other hand, the producer price index of Finland and Ireland dropped 0.6%, followed by Lithuania and Germany that showed an increase of 0.7% and 0.95 respectively.
In Cyprus, the producer price index for Quarries and Mines recorded the largest increase of 8.5%, followed by the manufacturing index with 4.6%. The index for Power Supply, Water and Natural Gas fell 6.8%.
OEB: Impacts from harmonization cost
The increase in the producer prices is largely attributable to the increase in the production cost as a result of the EU harmonization. This occurred in the second half of 2003, when there were investments in production, OEB Deputy General Manager, Costas Christofides told StockWatch. “The fact that the variation of the producer price index is higher than the rest of the EU has affected negatively the island’s competitiveness. The Cost of Living Adjustment forces producers to transfer the increased production cost to the consumer. What is comforting, however, is the fact that the quality of the Cyprus products has been upgraded”, Mr. Christofides concluded.
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