Cyprus inflation among highest in EU

Cyprus inflation rate far outpaces EU average at 4.4 per cent in July Cyprus recorded annual inflation of 4.4 per cent in July 2026, placing it among the countries with the highest price increases in the European Union, according to figures released on Wednesday by both the Cyprus Statistical Service (Cystat) and Eurostat. The Harmonised Index of Consumer Prices (HICP) rose by 4.4 per cent compared with July 2025 and increased by 0.7 per cent between June and July, according to the statistical service. Eurostat data showed that Cyprus had the joint third-highest annual inflation rate in the EU, alongside Bulgaria, with only Romania at 8.2 per cent and Lithuania at 5.4 per cent recording higher rates. The figure was considerably above the 3.0 per cent EU average and the 2.9 per cent euro area average, meaning Cyprus continued to experience substantially stronger price pressures than the wider European economy. EU annual inflation itself increased from 2.9 per cent in June to 3.0 per cent in July, while euro area inflation rose from 2.8 per cent to 2.9 per cent. A year earlier, annual inflation stood at 2.0 per cent in the euro area and 2.4 per cent across the EU. Cyprus’s July figure therefore remained more than one percentage point above the EU average, highlighting the country’s relatively elevated inflation environment despite the broader European increase being comparatively modest. The latest figures also showed that Cyprus was among nine EU member states where annual inflation increased between June and July, while inflation fell in 15 countries and remained unchanged in three. At national level, the strongest annual price increases in Cyprus came from restaurants and accommodation services, where prices were 12 per cent higher than in July 2025. This was followed by housing, water, electricity, natural gas and other fuels, where prices increased by 7 per cent over the year. The largest annual declines were recorded in clothing and footwear, down 5.2 per cent, and information and communication, down 2.3 per cent. Looking only at the change between June and July, clothing and footwear recorded the largest movement, with prices falling by 10.8 per cent. This was followed by a 5.5 per cent increase in restaurants and accommodation services, a 1.9 per cent rise in transport costs and a 1.7 per cent increase in housing, water, electricity, natural gas and other fuels. The statistical service also reported that, among the broader economic categories, energy recorded the largest annual increase, with prices rising by 10.2 per cent compared with July 2025. On a monthly basis, meanwhile, services recorded the largest increase, at 3.5 per cent. The European figures provide further context for Cyprus’s relatively high inflation rate. Across the euro area, services made the largest contribution to annual inflation, adding 1.55 percentage points to the overall rate. Energy contributed a further 0.94 percentage points, while non-energy industrial goods and food, alcohol and tobacco each contributed 0.23 percentage points. The latest European data show a wide divergence in inflationary pressures across member states. Sweden recorded the lowest annual inflation rate at just 0.3 per cent, followed by the Czech Republic at 1.3 per cent, while Denmark and Hungary both registered 1.6 per cent. At the other end of the scale, Romania recorded inflation of 8.2 per cent, Lithuania 5.4 per cent, and both Cyprus and Bulgaria 4.4 per cent. Cyprus’s position in the European rankings therefore points to particularly strong domestic price pressures, rather than an inflation problem shared evenly across the EU. The difference is especially pronounced when compared with the euro area, where the 2.9 per cent annual rate was 1.5 percentage points below Cyprus’s 4.4 per cent. The figures also underline the importance of services and energy in Cyprus’s inflation performance, with the strongest annual increases coming from accommodation and restaurants, housing-related costs and energy. At the same time, falling prices for clothing and footwear and information and communication provided some offset to the wider increases. The July data suggest that Cyprus entered the second half of 2026 with inflation running significantly faster than the European average, even as inflation across the EU and euro area edged higher during the month.