In the latest economic update, Cyprus continues to see a decrease in inflation, with March 2025 marking a rate of 1.6%, a decline from February’s 1.9%. This trend has persisted since December 2024, according to recent data released by the government.
Fluctuations In Consumer Goods
The data, compiled by the Consumer Protection Service, offers a detailed view of 250 basic consumer products. These were tracked across 400 retail locations island-wide throughout March. Notably, 23 categories saw price increases, whereas 21 experienced decreases. Milk prices remained steady from February, while significant hikes were seen in Cypriot coffee prices, which soared by 8.7% month-on-month and are up 24.6% compared to last year.
Other increases included frozen hamburgers (6.5%), baby foods (4.1%), and bottled water (4.1%). Meanwhile, various items like vegetables saw a steep price drop of 23%, fresh fish decreased by 11.3%, and vegetable cooking oil by 6.6%. The price reductions extended to legumes, tampons, and fabric softeners.
Underlying Causes And Sector Insights
The decline in the inflation rate is largely due to a drop in clothing and footwear prices, counterbalanced by hikes in restaurant and hotel charges, alongside rising costs for foodstuffs and non-alcoholic beverages. The Consumer Protection Service highlights this data solely as a guideline for consumers, stressing the importance of personal diligence when shopping.
Small and medium-sized enterprises (SMEs) remain a central pillar of Cyprus’ economy, supporting employment, innovation and local production networks. Their long-term competitiveness increasingly depends on access to modern technologies, operational upgrades and targeted investment that improves efficiency and productivity.
The Thalia Initiative: A Strategic Investment Framework
The Thalia 2021–2027 Program plays a key role in supporting this transition. The initiative provides financial assistance to both new and established SMEs, particularly in manufacturing and selected economic sectors, helping businesses modernize infrastructure, upgrade technology and improve production capacity. With a total budget of €50 million and co-financing from the European Union, the program aims to strengthen competitiveness while encouraging entrepreneurship and job creation.
Case Study: Pivo Microbrewery’s Production Revolution
Pivo Microbrewery illustrates how targeted investment can accelerate growth. Before receiving funding, co-owner Thanasis Poluneikis identified limited production capacity as a major obstacle to meeting rising demand. The introduction of modern machinery and updated technology has significantly improved production processes. According to Poluneikis, the new equipment has increased precision and consistency in quality control, helping maintain product freshness and standards throughout distribution. The upgrades also allowed the company to expand production and develop new partnerships, supporting broader market reach.
Enhancing Product Offerings: The Vanilla Aroma Bakery Experience
Vanilla Aroma Bakery represents another example of modernization through investment support. Owner Giannis Toumpas used the funding framework to upgrade both the facility layout and production equipment. The improvements have accelerated operations and increased efficiency, enabling the bakery to refine existing products while introducing new offerings. These changes have strengthened customer experience and reinforced the brand’s position in a competitive market where quality and presentation remain key differentiators.
Financial Support As A Catalyst For Growth
These examples highlight the role of the Thalia Initiative as a financing tool that translates investment into measurable business development. By supporting equipment upgrades, technology adoption and infrastructure improvements, the program contributes to the long-term sustainability of SMEs, encourages innovation and supports job creation. The continued modernization of small and medium-sized enterprises is helping build a more resilient and competitive business environment that supports broader economic growth in Cyprus.
Pivo Microbrewery modernizes its production line to meet growing demand.Vanilla Aroma Bakery enhances operational efficiency through technological upgrades.Financial support transforming local SMEs.
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