Cyprus inflation outpaces euro area average as energy prices bite

Cyprus’ annual inflation rate is estimated to have risen to 5.4 per cent in October, placing it among the European Union’s higher-inflation countries, as price pressures across the euro area continued to intensify, with energy costs driving much of the increase. According to a flash estimate published on Wednesday by Eurostat, annual inflation across the euro area is expected to have reached 4 per cent in October, up from 3.8 per cent in September. Cyprus’ estimated rate was 1.4 percentage points above the euro area average, while the island’s monthly inflation rate for October was estimated at 0.2 per cent. Among EU member states, Lithuania recorded the highest annual inflation rate at 6.1 per cent, followed by Bulgaria at 6 per cent, while Greece and Italy were tied at 5.6 per cent. Cyprus’ estimated rate of 5.4 per cent placed it just below that group. At the other end of the scale, Malta recorded the lowest annual inflation rate at 2.3 per cent, followed by Germany at 2.8 per cent and Slovakia at 2.9 per cent. The latest figures suggest that inflation in Cyprus has accelerated considerably over the past year, rising from 0.2 per cent in October 2025 to 3.5 per cent in May 2026. It then climbed to 4.1 per cent in June, 4.4 per cent in July and 5.2 per cent in August, remaining at that level in September before reaching an estimated 5.4 per cent in October. The figures come as energy prices continue to exert significant pressure on inflation across Europe. Eurostat’s flash estimate showed that energy was expected to record the highest annual inflation rate in the euro area in October, at 20.8 per cent, compared with 18.9 per cent in September. Services inflation was estimated at 3.3 per cent, up from 3.2 per cent, while food, alcohol and tobacco prices were expected to rise by 1.6 per cent, compared with 1.3 per cent in September. Non-energy industrial goods were estimated to have recorded an annual inflation rate of 1.2 per cent, up from 1.1 per cent. The inflation figures follow comments by Finance Minister Makis Keravnos earlier on Wednesday, who said the ongoing global and pan-European energy crisis was continuing to push up costs for households and businesses. “As long as there is a global and pan-European energy crisis affecting every activity, whether that of an individual or a business, and increasing costs, unfortunately we will continue to see an upward trend in inflation,” Keravnos said. He described the trend as an unavoidable reality under the current circumstances, while welcoming the European Central Bank’s latest decision not to raise interest rates further. “I am particularly pleased with the latest decision by Christine Lagarde that interest rates will not be increased further,” Keravnos said, referring to the ECB president. The minister said the government was monitoring price developments and the cost of living on a daily basis, while assessing which groups of citizens might require additional support. The figures underline the challenge facing Cyprus as inflation remains above the euro area average, with the energy crisis continuing to affect prices and household purchasing power.