Resurgence of inflationary pressures in Cyprus

Preliminary Eurostat data indicates a resurgence of inflationary pressures in Cyprus for January, with an estimated annual inflation rate of 1.7%, matching the Eurozone average. While the overall price index remains moderate, the data suggests persistent cost-of-living pressures. The increase is driven by rising prices in services and food, while energy prices continue to exert a deflationary effect. In response, the Cypriot government has extended reduced VAT on household electricity until March 2027 to mitigate energy costs. This measure is estimated to cost €40 million.