Cyprus emerged in August as one of the EU’s highest-inflation economies, with annual consumer prices rising 5.2%, according to Eurostat. Only Romania and Lithuania recorded higher rates.

Inflation Accelerates Sharply

The August reading marked a significant increase from 0.0% a year earlier. Annual inflation rose from 1.5% in March to 3.0% in April, 3.5% in May, 4.1% in June, 4.4% in July and 5.2% in August.

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Prices also increased 1.5% month on month in August, compared with 0.4% in both the euro area and the EU.

Cyprus Outpaces Euro Area And Greece

Euro area inflation rose to 3.2% in August from 2.9% in July, while EU inflation reached 3.2%, up from 3.0%. Cyprus’ annual rate was therefore 2 percentage points above both regional averages.

Greece also recorded faster inflation, with its annual rate rising to 3.7% from 2.7% in July. Monthly inflation in Greece was 0.4%, matching the euro area and EU rates.

Romania had the EU’s highest annual inflation at 6.3%, followed by Lithuania at 5.6%. Sweden recorded the lowest rate at 0.3%, followed by Estonia at 1.3% and the Czech Republic at 1.5%.

Services And Energy Drive Price Growth

Services were the largest contributor to euro area inflation in August, adding 1.43 percentage points to the annual rate. Energy contributed 1.29 percentage points, followed by non-energy industrial goods at 0.30 percentage points and food, alcohol and tobacco at 0.22 percentage points.

For Cyprus, the latest data show a sharp widening in the gap with broader European inflation. The island’s monthly increase of 1.5% was also 1.1 percentage points above the euro area and EU rates.