Causes and Implications of Elevated Inflation in Cyprus
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Summary:
Inflation has risen sharply in Cyprus, initially driven by imported prices, but increasingly broadening to domestic prices. A Phillips Curve estimate attributes the high inflation largely to energy prices, external price pressures, and inflation expectations at the end of 2022. Historically high pass-through of inflation shocks to wages—amplified by a tight labor market—may make inflation persistent. This calls for policies to stem inflationary pressures while protecting vulnerable households.
Series:
Selected Issues Paper No. 2023/042
Subject:
Energy pricing Expenditure Income Inflation International organization Monetary policy National accounts Oil prices Prices
Frequency:
Regular
English
Publication Date:
July 7, 2023
ISBN/ISSN:
9798400247453/2958-7875
Stock No:
SIPEA2023042
Format:
Paper
Pages:
14
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