Inflation in Cyprus has remained stubbornly at 3% for the second month in a row, showing little sign of easing—even as government policies, including a zero VAT rate on select goods until the end of 2025, aim to curb rising costs.
The latest data from Eurostat, released on Monday, caught many by surprise. The harmonized inflation rate for January stood at 3% year-on-year, a notable jump from 2.1% in January 2024 but still a far cry from the staggering 6.8% recorded in January 2023.
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Across the Eurozone, inflation edged up slightly, reaching 2.5% in January from 2.4% in December. Cyprus is among eight countries where inflation remains between 3% and 5%, alongside Croatia (5%), Belgium (4.4%), Slovakia (4.1%), Austria (3.5%), Lithuania (3.4%), Greece (3.1%), and Latvia (3%).
Several other European nations also reported inflation above the 2% mark, including Slovenia (2.3%), Luxembourg (2.4%), Portugal (2.7%), Germany and Estonia (2.8%), and Spain and the Netherlands (2.9%). Meanwhile, the lowest inflation rates were observed in Ireland (1.5%), Finland (1.6%), Italy and Malta (1.7%), and France (1.8%).
Breaking down the inflationary pressures, energy prices in the Eurozone climbed 1.8% compared to a modest 0.1% rise in December. Food inflation, however, showed a slight cooldown, with the food, alcohol, and tobacco index rising 2.3%, down from 2.6% previously. Meanwhile, service sector inflation eased marginally to 3.9% from 4%.
Despite government intervention, inflation in Cyprus appears to be holding firm, raising concerns over the effectiveness of current measures in bringing prices under control.
