ECONOMY

In Brief

Above-inflation pay hikes for public sector employees Public sector workers will get an above-inflation base pay increase of 3.5 percent this year, based on the government’s incomes policy, the Finance Ministry said yesterday. «The base salary of public sector employees… will rise by 3.5 percent,» the ministry said. «The wages will increase by a level significantly above forecast inflation.» It said public sector workers’ disposable income will get a further boost from income tax reforms that come into effect this year, cutting tax rates and raising tax-exempt income to 12,000 euros. The government projects consumer inflation will slow to 3.0 from 3.2 percent in 2006. It is aiming to shrink the budget deficit to 2.4 percent of gross domestic product (GDP) from an estimated 2.6 percent last year. Teachers, police, nurses and defence personnel were also singled out by the ministry for higher pay increases. These will range from 4.6 percent for about 250,000 teachers and nurses to 7.8 percent for about 3,000 defense personnel. (Reuters) Bulgarian inflation rises to 6.9 percent SOFIA (Reuters) – Bulgaria’s annual European Union harmonized consumer inflation (HCPI) rose to 6.9 percent in January from 6.1 percent at the end of last year, the central bank announced yesterday. Bulgaria joined the European Union on January 1 and has introduced the bloc’s harmonized index, which differs from its national consumer price index, the central bank said. Monthly inflation in January was 1.6 percent, the bank said in a statement. It did not provide relevant data for December. The HCPI takes into account inflationary pressures from foreign consumption in the Balkan country and will also include second-hand cars prices in the consumer basket. The weight of volatile food prices will be lowered in the consumer basket of the HCPI compared to the national index, while the weight of transport prices will be increased. The central bank said it would use the EU-harmonized index as its key indicator of the inflation dynamics in the country, as it would also be used by Brussels when gauging the country’s readiness to adopt the euro, perhaps as early as 2010. Under the national methodology, consumer prices increased by 7.2 percent in January versus 6.5 percent in December. Tax hurts profits Europe’s biggest gaming group OPAP announced yesterday that its 2006 profit will be hurt by taxes paid on 2005 earnings. The lottery said it has paid taxes about -3.5 million after an audit of its 2005 finances, while about -2.8 million of the amount will impact its 2006 net profit. The firm has scheduled to release its 2006 financial results March 21. (Reuters) Bid Marfin Popular Bank announced yesterday it was in negotiations to acquire a stake in the Cyprus Tourism Development Company, a subsidiary of Cyprus’s Louis Group. The Cyprus Tourism Development Company owns and operates the Nicosia Hilton hotel. (Reuters) Appointment The chairman of Cyprus’s stock exchange, Akis Kleanthous, was appointed minister of education yesterday, officials said. Kleanthous, who has a background in banking and marketing, will be sworn in on Tuesday. He replaces Pefkios Georgiades, who died in January. Kleanthous’s replacement was not immediately announced. (Reuters)