The annual inflation rate of the Harmonised Consumer Price Index in Cyprus dropped to 1.6 per cent in March, mainly driven downward by a decrease in energy prices, according to a report released on Wednesday by the Cyprus Statistical Service (Cystat).

According to the report, when compared to the previous month, the inflation rate for March was limited to 0.8 per cent, while for the period between January and March 2024, the annual inflation rate stood at 2 per cent.

It should be noted that the Harmonised CPI of 1.6 per cent reflects the overall increase in consumer prices relative to a base year, considering a broader basket of goods and services consumed by households and harmonising the methodology across European Union countries. It provides a standardised measure for comparing inflation levels across countries.

On the other hand, the inflation rate of 0.8 per cent recorded in March represents the percentage change in consumer prices from the previous month.

This rate offers a more immediate snapshot of price movements and inflationary trends over a shorter period, in this case, month-on-month.

Similarly, the annual inflation rate of 2 per cent reflects the average percentage change in consumer prices over the past year, in this case, for the first quarter of 2024

The report also showed that when compared to March 2023, the largest decreases were recorded in the category of Housing, Water, Electricity, and Gas with 2.2 per cent, and in the category of Furniture, Household Equipment, and Cleaning Products with 0.7 per cent.

Conversely, significant increases were recorded in the category of Restaurants and Hotels, which rose by 5.7 per cent, and in the category of Recreation and Culture, which recorded an increase of 2.6 per cent.

Regarding economic categories, March 2024 saw a significant decrease of 3.9 per cent, while inflationary pressures persist in services, where the annual inflation rate rose to 4.2 per cent.