Inflation in Cyprus accelerates to 5.2% — second-highest rate in the eurozone

Annual inflation in Cyprus accelerated to 5.2% in August. This was the second-highest rate in the eurozone after Lithuania, where it reached 5.8%, according to data based on the Harmonised Index of Consumer Prices.

A year earlier, in August 2025, prices in Cyprus had not risen at all year on year. The acceleration began in spring: the index stood at 1.5% in March, 3.0% in April, 3.5% in May, 4.1% in June and 4.4% in July. According to the national index calculated by the Statistical Service of Cyprus (CyStat), August inflation was milder at 3.5%.

Energy is making the main contribution. In the eurozone, energy prices rose by 14.3% year on year in August, compared with 10.3% a month earlier, while overall inflation in the currency union reached 3.3%, against a target of 2%.

On 10 September, the European Central Bank raised its deposit rate to 2.5%. ECB President Christine Lagarde warned that the energy shock could be prolonged. The regulator expects inflation to reach 3% and economic growth to stand at 0.9% in 2026, 2.5% and 1.4% respectively in 2027, and a return to 2.1% in 2028.

The Cypriot authorities have extended the reduced excise duty on fuel — a discount of 8.33 cents per litre — until 30 November 2026.