Consumer prices in Cyprus fell for the fifth consecutive month in September, with the annual inflation rate dropping to -0.7%. According to data from the Statistical Service, the continued deflation is primarily driven by a sharp decrease in energy and agricultural product costs, which has offset rising prices in the services sector.
The Drivers of Deflation
The most significant downward pressure on the annual price level came from the energy sector. Electricity costs plummeted by 10.9% and petroleum products fell by 2.7% compared to the same month last year.
The cost of agricultural products also saw a steep year-on-year decline of 5.0%. In terms of their overall impact on the Consumer Price Index (CPI), the Transport and Food sectors had the biggest negative contributions.
Where Prices Are Still Rising
While energy and some food costs fell, the services sector as a whole recorded a 3.1% annual price increase. This indicates that inflationary pressures persist in certain parts of the economy.
The largest price hikes were seen in:
- Restaurants and Hotels (+4.4%)
- Education (+3.4%)
- Recreation and Culture (+3.3%)
These service-based categories had the largest positive impact on the overall inflation rate.
Monthly and Year-to-Date Trends
Despite the annual deflation, consumer prices did rise by 0.6% from August to September. This monthly increase was mainly driven by seasonal price changes in Clothing and Footwear and a rise in food prices.
For the first nine months of 2025, the data shows a consistent trend of rising costs in the hospitality and education sectors, while the price of clothing and footwear has seen a significant decline over the period.
Source: Stockwatch.com.cy