Cyprus inflation among lowest in EU as energy prices fall

Cyprus recorded one of the lowest inflation rates in the European Union in February 2026, according to figures from both Eurostat and the Cyprus Statistical Service (Cystat).

According to Eurostat, Cyprus annual inflation stood at 0.9 per cent in February 2026, placing it among the lowest in the bloc alongside Denmark and the Czech Republic.

This compares with 1.2 per cent in January 2026 and 0.1 per cent in December 2025, indicating some fluctuation but overall subdued inflationary pressures.

On a month-on-month basis, inflation in Cyprus remained flat at 0.0 per cent in February, reflecting stable consumer prices.

Across the euro area, annual inflation rose to 1.9 per cent in February 2026 from 1.7 per cent in January, while in the wider European Union it increased to 2.1 per cent from 2.0 per cent.

A year earlier, inflation had stood at 2.3 per cent in the euro area and 2.7 per cent in the EU, showing a broader downward trend over the past year.

The lowest inflation rates in February were recorded in Denmark at 0.5 per cent, Cyprus at 0.9 per cent and the Czech Republic at 1.0 per cent, while the highest were seen in Romania, Slovakia and Croatia.

Eurostat data also showed that inflation declined in eleven member states, remained stable in four and increased in twelve compared with January 2026, reflecting mixed price dynamics across the bloc.

In terms of components, services contributed the most to euro area inflation at 1.54 percentage points, followed by food, alcohol and tobacco at 0.48 percentage points and non-energy industrial goods at 0.17 percentage points.

Energy, by contrast, had a negative contribution of minus 0.30 percentage points, helping to contain overall inflation.

Meanwhile, national data from Cystat confirmed that Cyprus recorded an annual increase of 0.94 per cent in the harmonised index of consumer prices between February 2025 and February 2026.

Over the same period, the data showed that recreation, sports and culture rose by 5.4 per cent, while restaurants and accommodation services increased by 4.9 per cent, representing the largest upward movements.

In contrast, clothing and footwear fell by 6.2 per cent, while housing, water, electricity, natural gas and other fuels declined by 3.5 per cent, marking the largest decreases.

On a monthly basis, the HICP fell slightly by 0.01 per cent between January and February 2026, indicating marginal downward pressure on prices.

The most notable month-on-month changes were recorded in clothing and footwear, which rose by 0.8 per cent, and housing-related costs, which declined by 0.5 per cent.

From an economic category perspective, energy prices dropped sharply by 8.4 per cent compared with February 2025, while services increased by 4.2 per cent.

Compared with the previous month, energy prices again recorded the largest decline at 0.9 per cent, reinforcing their role in dampening inflation.

The data highlights the significant impact of falling energy costs on Cyprus inflation, offsetting increases in services and leisure-related sectors.

Overall, the figures point to continued price stability in Cyprus relative to the EU, with inflation remaining well below the euro area average.

This trend suggests that domestic inflationary pressures remain contained, even as price dynamics vary across sectors and the broader European economy.