ECONOMY

Cyprus prepares for euro entry as service costs rise

NICOSIA (Reuters) – Cyprus’s Finance Ministry yesterday said price hikes in certain services, including medical costs, could not be justified by rising prices of crude and grain impacting most prices this year. Authorities on the island, a eurozone member from January 1, have been monitoring prices for the past year and say there have been no broad-based cases of profiteering. Consumer prices were running at 3.5 percent in November, the highest point in the past year, but most of it was triggered by high prices of grain and crude and the trickle-down effect on foodstuffs. «Generally we have not observed any increase in prices of sensitive products which could be attributed to a possible premature ’rounding up’ of prices,» said Zenon Kontolemis, a consultant at the Cypriot Ministry of Finance. But according to a survey released yesterday, costs for dental fillings have risen three times in the past 11 months by a cumulative 18.1 percent, an ear, nose and throat specialist by 17 percent, and a trip to the barber by 11.9 percent. «There the increases are slightly more difficult to justify,» Kontolemis said. Inflation accelerated by 2.8 percent in the last five months of the year compared to 1.7 percent in the first six months and were broadly tracking global trends, the survey said. Although price increases were due largely to external factors, the public remained convinced that the changeover was to blame. «There is definitely a chasm between reality and perceptions,» Kontolemis said. Authorities introduced compulsory dual pricing on September 1. Price monitoring includes «naming and shaming» enterprises caught profiteering from the changeover and getting businesses to sign up to a fair pricing scheme.