Cyprus Inflation Dips To -0.3 Percent In October 2025: An Analysis Of Deflation Trends

by THEFUTURE.TEAM

November 7, 2025

The Cyprus Statistical Service (Cystat) reported that the inflation rate for October 2025 fell to -0.3 percent, indicating a period of mild deflation where consumer prices were slightly lower compared to October 2024. The Consumer Price Index (CPI) experienced a modest month-to-month increase, rising from 117.71 to 118.25 units since September 2025.

Sectoral Performance And Price Adjustments

This deflationary trend reflects a nuanced reshaping of the economy. Notably, the services sector led in positive change with a 3 percent increase over the past year, underscoring robust activity in industries such as restaurants and hotels, which also saw a significant CPI contribution of 0.48 units year-on-year. Conversely, sectors such as electricity and agricultural products recorded declines of 7.5 percent and 2.6 percent respectively, with electricity exhibiting the largest monthly change by 1.7 percent compared to September 2025.

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Detailed Analysis Of Category Shifts

The report highlights important variations across economic categories. Compared with October 2024, clothing and footwear prices declined by 6.7 percent, while food and non-alcoholic beverages decreased by 2.1 percent. In contrast, sectors including restaurants and hotels and education saw increases of 4.4 percent and 3.5 percent respectively. A comparison with September 2025 reveals an additional 3.6 percent increase in clothing and footwear, alongside a 1.2 percent uptick in education.

Impact On The Consumer Price Index

Analyzing the CPI components, the year-on-year impact in October 2025 was driven positively by categories such as restaurants and hotels (0.48 units) and education (0.16 units). However, the largest negative impacts were observed in food and non-alcoholic beverages (-0.52 units) and clothing and footwear (-0.51 units). On a month-to-month basis, clothing and footwear exhibited the highest impact at 0.25 units, while housing and related utilities also contributed meaningfully. Specific items, such as catering services, positively influenced the index by 0.50 units, whereas both clothing and electricity detracted by 0.43 units each, with fresh fruit marking the most significant single-item negative shift (0.15 units).

Conclusion

This detailed CPI analysis by Cystat underscores how varied sectoral dynamics are shaping the Cypriot economy. The slight deflation alongside divergent pricing trends across key categories provides critical insights for policymakers, investors, and businesses as they navigate a complex economic landscape.

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Mercedes-Benz Posts Higher Profit Despite China Slowdown

by THEFUTURE.TEAM

July 29, 2026

Mercedes-Benz reported stronger-than-expected second-quarter results, lifting its shares on Tuesday despite mounting pressure from Chinese automakers and a weaker outlook for sales and revenue.

The earnings provided a boost for Europe’s auto sector, where manufacturers continue to grapple with tariffs, softer demand and intensifying competition from Chinese rivals. Volkswagen, Mercedes-Benz and BMW have all accelerated restructuring efforts in response.

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Cost Discipline Lifts Quarterly Profit

Mercedes-Benz shares rose as much as 5.9% following the results before trimming gains to trade 3.5% higher by 1118 GMT. The company reaffirmed its profit margin guidance for its core passenger car business after reporting an adjusted return on sales of 4.0% for the second quarter, above market expectations and within its 3% to 5% target range.

“In an environment where some automakers are ringing alarm bells on their competitive positioning, Mercedes delivered a clear and confident message,” Morningstar analyst Rella Suskin said.

Second-quarter operating profit increased 22% to €1.5 billion ($1.7 billion), despite a 3% decline in revenue. Lower administrative and research and development costs, together with strong performances from the financial services and vans divisions, supported earnings, while the results also included a €131 million gain related to the planned sale of leasing subsidiary Athlon.

China Remains The Key Pressure Point

Despite stronger profitability, Mercedes continues to face a challenging market environment. Sales in China fell 30% during the second quarter, prompting the company to abandon earlier expectations for stable car sales and group revenue. It now expects both to decline slightly from a year earlier.

BMW also lowered its outlook in June following a deeper-than-expected slowdown in China, highlighting the pressure facing Germany’s premium carmakers. At the same time, Mercedes said Chinese manufacturers are increasingly expanding into European markets, although Chief Executive Ola Kaellenius said their focus remains on higher-volume segments rather than the premium market.

“But that is not a reason to sit back and be relaxed,” he said.

Manufacturing Shift Continues

Mercedes is also reshaping its manufacturing footprint. The company said its German factories will undergo a more aggressive push toward leaner production, although it declined to provide further details while talks with labour representatives continue. Production is also being expanded in lower-cost Eastern European locations, including Hungary, where the company is increasing capacity at its Kecskemet plant, as well as in Poland.

Chief Financial Officer Harald Wilhelm said the full-year margin for the passenger car division is expected to come in at the lower end of the company’s guidance range, reflecting a higher share of electric vehicle sales in Europe, which remain more expensive to produce and continue to weigh on profitability.

“We must continue to work flat out to reduce costs so that we can remain competitive on the prices of our products,” Kaellenius said.

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