ECONOMY

In Brief

Cyprus EU harmonized inflation hits 5.2 percent NICOSIA (Reuters) – Cyprus’s EU-harmonized inflation of consumer prices (HICP) lurched to a five-year high of 5.2 percent in June, its highest level since April 2003 on the back of rampaging food and fuel costs. The tracker was running at 4.6 percent year-on-year in May, which was just shy of a 2008 high of 4.7 percent in February. In June of 2007 harmonized inflation was running at 1.9 percent year-on-year. At 5.2 percent, June HICP data was considerably higher than the average in the 15-member eurozone of 4 percent. But the Cyprus HICP reading underperformed national consumer inflation, which climbed to a five-year record of 5.47 percent last month. The Finance Ministry and central bank expect inflation to moderate over the course of the year. The latest Finance Ministry projections put inflation at between 4 and 4.5 percent for the whole of 2008. Power price rise impacts on Turk CPI ISTANBUL (Reuters) – Large Turkish electricity price hikes at the start of July will push consumer price inflation up 0.5 percentage points, the Turkish central bank said yesterday. In its regular monthly statement on inflation data, the bank reiterated that it expected inflation to remain high due to base effects before falling gradually from the fourth quarter. Turkish consumer prices showed a surprise fall in June amid a sharp decline in food prices, official data had shown on Thursday. The figures were not seen changing expectations of further interest rate hikes to come. Energy and food prices have driven a recent rise in inflation but the central bank said there had been a correction in unprocessed food prices in June. ArcelorMittal ArcelorMittal has signed a production agreement with Bulgaria’s Kremikovtzi, as part of the steel major’s bid to take over the Balkan country’s troubled steel mill. Under the deal ArcelorMittal will provide raw materials to Kremikovtzi to produce steel and allow for urgent environmental and equipment upgrades, the mill said yesterday. «This cooperation has a possibility to lead to potential investments in future. That will provide a long-term viability of the plant,» Kremikovtzi said in a statement. ArcelorMittal and Ukrainian billionaire Kostyantin Zhevago are vying to take over Kremikovtzi, which accounts for 10 percent of Bulgaria’s exports but has run into financial trouble and faces insolvency. (Reuters) Romania budget Romania’s consolidated budget revenues grew 36 percent on the year to 74.8 billion lei ($32.5 billion) in the first half of the year, data from the Finance and Economy Ministry showed yesterday. Revenues amounted to roughly 16 percent of the latest government forecast for gross domestic product for this year. The centrist minority government targets revenues at around 39 percent of GDP in 2008, including the absorption of some 2 billion euros’ worth of European Union funds. Ministry officials have said Romania has a good chance of meeting this year’s goal due to a strong rise in revenue thanks chiefly to strong wage growth and improved tax collection. It undershot last year’s initial revenue target of 35 percent of GDP by roughly 3 percentage points. (Reuters)