Cyprus Achieves Zero Inflation While EU Faces Rising Price Pressures

by THEFUTURE.TEAM

October 19, 2025

Overview Of Inflation Trends

Cyprus recorded a remarkable achievement in September 2025 by maintaining a 0.0% annual inflation rate, positioning it as the EU member state with the lowest inflation according to the latest figures released by Eurostat. This outcome contrasts with a broader European backdrop, where inflationary pressures continue to build.

Euro Area And European Union Dynamics

Across the euro area, annual inflation increased to 2.2% in September from 2.0% in August, up from 1.7% a year earlier. In the wider European Union, the inflation rate ascended to 2.6% in September from 2.4% in August, a rise from 2.1% recorded a year before. These figures underscore a steady upward trajectory in consumer price levels over the past year.

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Diverse Economic Landscapes Across Member States

Within the EU, Cyprus stands out with its unchanged rate, followed by France at 1.1% and both Italy and Greece at 1.8%. At the opposite end of the spectrum, Romania, Estonia, Croatia, and Slovakia experienced much higher rates of inflation, with Romania at 8.6%, Estonia at 5.3%, and Croatia and Slovakia both at 4.6%. Such disparities highlight the varied economic conditions across the Union.

State By State Inflation Shifts

Comparative data from August 2025 indicates that annual inflation declined in eight member states, remained stable in four, and increased in fifteen, signaling broad-based upward price pressures that continue to challenge policymakers and businesses alike across the Union.

Components Driving The Inflation Surge

Examining the contributing components, the service sector emerged as the largest driver of inflation, adding 1.49 percentage points to the annual rate in the euro area. This was closely followed by the food, alcohol, and tobacco segments which contributed 0.58 percentage points. Non-energy industrial goods added 0.20 percentage points, while energy prices exerted a slight negative influence of -0.03 percentage points. These contributions reflect the complex interplay of various sectors in shaping overall consumer price dynamics.

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Central Bank Of Cyprus Balance Sheet Reflects Strong Eurosystem Position

by THEFUTURE.TEAM

February 17, 2026

Overview Of Financial Stability

The Central Bank of Cyprus (CBC) has released its latest balance sheet, reaffirming its steadfast role within the Eurosystem. The balance sheet, featuring total assets and liabilities of €29.545 billion, underscores the institution’s stable financial posture at the close of January 2026.

Asset Allocation And Strategic Holdings

Governor Christodoulos Patsalides issued the balance sheet, which details the CBC’s asset composition under the Eurosystem framework. Notably, the bank’s gold and gold receivables amounted to €1.635 billion, providing a significant hedge and stability to its balance sheet. Additional asset categories include claims on non-euro area residents denominated in foreign currency at €1.099 billion, while claims on euro area residents in both foreign and domestic currency add further depth to its portfolio.

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The most substantial asset category, intra-Eurosystem claims, reached €19.438 billion, an indication of the CBC’s deep integration with its European counterparts. Furthermore, euro-denominated securities held by euro area residents contributed €6.587 billion. Despite a marked emphasis on these areas, lending to euro area credit institutions in monetary policy operations recorded no activity during the period.

Liability Structure And Monetary Policy Implications

On the liabilities side, banknotes in circulation contributed €3.218 billion. Liabilities to euro area credit institutions associated with monetary policy operations were notably the largest single category, totaling €17.636 billion. Supplementary liabilities included those to other euro area residents, which aggregated to €4.989 billion, with government liabilities playing a predominant role at €4.754 billion.

Other liability items, such as claims related to special drawing rights allocated by the International Monetary Fund at €494.193 million, and provisions of €596.571 million, further articulate the CBC’s exposure. Revaluation accounts stood at €1.643 billion, and overall capital and reserves were confirmed at €333.822 million, completing the picture of a well-capitalized institution.

Conclusive Insights And Strategic Alignment

The detailed breakdown illustrates the CBC’s sizeable intra-Eurosystem exposures, reinforcing its central role within Europe’s monetary landscape. With an asset-liability balance maintained at €29.545 billion, the CBC’s financial position remains robust, indicating a commitment to structural stability and strategic risk management.

This fiscal disclosure not only provides transparency into the CBC’s operations but also serves as a benchmark for comparative analysis among other central banks within the Eurosystem, highlighting the intricate balance between asset liquidity, regulatory oversight, and monetary policy imperatives.

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