Cyprus annual inflation slows to 1.2 per cent as energy prices fall

Cyprus’ annual inflation rate stood at 1.2 per cent in January 2026, remaining below the euro area and EU averages as price pressures across the bloc continued to ease, according to data released by statistical service (Cystat) and Eurostat. 

The Harmonised Index of Consumer Prices (HICP) decelerated to 1.2 per cent compared with January 2025, when it stood at 2.9 per cent, while falling by 0.3 per cent month-on-month.

On an annual basis, the strongest increases were recorded in recreation, sports and culture, up 5.8 per cent, followed by restaurants and accommodation services, up 4.8 per cent, and educational services, up 3.4 per cent.

Food and non-alcoholic beverages increased by 3.2 per cent, alcoholic beverages and tobacco by 0.9 per cent, health by 0.5 per cent, and personal care and miscellaneous goods by 1.2 per cent.

By contrast, clothing and footwear fell by 6.2 per cent, marking the steepest decline.  

Housing, water, electricity and gas decreased by 2.5 per cent, transport by 0.5 per cent, and information and communication by 2.9 per cent.

On a monthly basis, clothing and footwear dropped sharply by 12.1 per cent, while food and non-alcoholic beverages rose by 3.7 per cent compared with December.

Looking at economic origin, energy declined by 6.5 per cent year-on-year and by 1.2 per cent month-on-month, continuing to weigh on the overall index.

Services rose by 4.3 per cent annually, while non-energy industrial goods fell by 2.8 per cent year-on-year and 3.7 per cent month-on-month.

Services account for nearly half of the basket, with a weight of 482.81 out of 1,000, compared with 223.72 for non-energy industrial goods and 88.45 for energy.

Across the euro area, annual inflation slowed to 1.7 per cent in January from 2 per cent in December, while in the European Union it eased to 2 per cent from 2.3 per cent.  

A year earlier, inflation stood at 2.5 per cent in the euro area and 2.8 per cent in the EU. The January figure matches Eurostat’s flash estimate published earlier this month. 

On a monthly basis, euro area prices fell by 0.6 per cent, while EU prices declined by 0.4 per cent. 

Among member states, the lowest annual rates were recorded in France at 0.4 per cent, Denmark at 0.6 per cent, and Finland and Italy at 1 per cent.  

O the contrary, Romania recorded 8.5 per cent, Slovakia 4.3 per cent, and Estonia 3.8 per cent.  

Germany stood at 2.1 per cent, Spain at 2.4 per cent, Greece at 2.9 per cent, Portugal at 1.9 per cent, Malta at 2.3 per cent, and Croatia at 3.6 per cent. 

Compared with December, annual inflation fell in 23 Member States, remained stable in one and rose in three. 

Eurostat data show that services made the largest contribution to euro area inflation in January, adding 1.45 percentage points, followed by food, alcohol and tobacco at 0.51 points.  

Non-energy industrial goods contributed 0.09 points, while energy reduced overall inflation by 0.39 percentage points. 

Energy prices across the euro area fell by 4 per cent year-on-year.  

Food, alcohol and tobacco rose by 2.6 per cent, while services increased by 3.2 per cent.  

Finally, core inflation excluding energy stood at 2.3 per cent, while excluding energy and unprocessed food it was 2.1 per cent.