Cypriot Minister of Finance Charilaos Stavrakis said on Wednesday that there was a downward trend in fuel prices, which would be beneficial to the island's economy and the spending capacity of consumers.

“The downward trend in the price of oil is a very satisfactory development and we hope this will translate into increased revenue for the average Cypriot consumer,” he said.

Referring to the reduction in fuel prices, on the international market, Stavrakis said ''the companies should now reduce fuel prices as fast as they have increased them when the price of oil worldwide was on the rise.''

''There is a downward tendency and this is very good,'' he said, noting that the loss in the local economy from the increase in oil prices was estimated at 500 million euro and thus ''as prices go down so does the loss, translating into lower electricity prices.''

Replying to questions, Stavrakis said he believed ''inflation in July will be about 5.6% but this will possibly be the highest rate we will see.''

The Minister predicted that by the end of the year inflation will probably be slightly lower than 5% and that in 2009 it was expected to be lower than 3%.

''So I think financial figures are progressing in a very satisfactory manner, the rate of economic growth which we predicted at 3.6% a few months ago seems to be enhanced and it appears that the year will close with a growth rate approaching 4% and this may be the highest in the Eurozone,'' he added.

Stavrakis pointed out that the Cypriot economy is vulnerable to outside factors, especially the increase in the price of fuel, ''so this is the time when we should focus on measures to save energy and invest in alternative energy sources.''

The local economy, he concluded, has “sound foundations and we must be pleased with the reduction in oil prices but this must not make us complacent.”

August 07, 2008, Financial Mirror