Retail sales slowed down significantly, according to a report published by the Statistical Service. Retail sales grew by a mere 1.7% in first five months of 2002 compared to 4.6% in the period between January and May of 2001. “The sales would have shrunk were it not for the big increase in auto sales, which boosted the overall index,” said a Service technocrat to StockWatch. The auto sales index, which bears a weight of 18% on the overall index, increased by 8.2%. According to the latest Monetary Policy Report of the Central Bank of Cyprus auto sales surged in anticipation of a VAT hike in July.

The Retail Sales’ Volume Index averaged 115 basic points in the first five months of 2002, compared to 113,1 points in 2001 and 108,1 points in 2000. The slow down in retails sales is mostly attributable to the significant drop (-6.8%) in food, drink and tobacco sales, which account for 28% of the index.

According to data published by the Statistical Service, in 2000, retail sales accounted for 43% of the Cyprus GDP.