Cyprus’ inflation rate eased to 2.9 per cent in July 2026, down from 3.1 per cent in June, as lower fuel prices and a sharp fall in clothing and footwear brought the consumer price index down on a monthly basis, figures released on Thursday by the statistical service (Cystat) showed.

The Consumer Price Index (CPI) decreased by 0.68 points, reaching 102.32 units in July compared with 103.00 units in June.

This represented a monthly decline of 0.66 per cent. However, prices remained 2.93 per cent higher than in July 2025, while inflation for the first seven months of the year stood at 1.87 per cent compared with the corresponding period of 2025.

Petroleum products continued to record the strongest annual increase among the main economic categories, rising by 12.19 per cent compared with July last year.

Agricultural goods followed with an increase of 8.20 per cent, while electricity and water prices were up by 7.36 per cent and services rose by 3.41 per cent.

By contrast, industrial goods excluding petroleum products recorded the only annual decrease, falling by 0.54 per cent.

The monthly picture was markedly different, with petroleum products recording the steepest decline, falling by 5.68 per cent compared with June.

Agricultural goods were also down by 2 per cent, while industrial goods excluding petroleum products decreased by 1.6 per cent.

At the same time, electricity and water prices rose by 5.28 per cent month-on-month, while services increased by 0.92 per cent.

Among the main categories of household expenditure, the largest annual increase was recorded in housing, water, electricity, natural gas and other fuels, where prices rose by 7.21 per cent.

Transport followed with an increase of 5.96 per cent, reflecting the continued pressure from fuel and travel costs, while food and non-alcoholic beverages were up by 4.94 per cent.

Recreation, sports and culture increased by 3.56 per cent, while educational services rose by 3.52 per cent and restaurants and accommodation services recorded an increase of 3.08 per cent.

More moderate annual increases were recorded in health, which rose by 1.11 per cent, and alcoholic beverages and tobacco, which increased by 0.98 per cent.

Personal care, social protection and miscellaneous goods and services were up by 0.32 per cent, while insurance and financial services remained broadly stable, rising by just 0.03 per cent.

However, these increases were partly offset by lower prices in clothing and footwear, which recorded the largest annual decline at 5.86 per cent.

Information and communication prices also fell by 3.26 per cent, while furnishings, home decoration, household equipment and routine home maintenance declined by 0.98 per cent.

Compared with June, the fall in clothing and footwear was considerably sharper, with prices dropping by 10.68 per cent.

Personal care, social protection and miscellaneous goods and services declined by 0.60 per cent, while food and non-alcoholic beverages fell by 0.49 per cent.

Recreation, sports and culture decreased by 0.45 per cent, furnishings and home maintenance were down by 0.38 per cent, and transport prices fell by 0.13 per cent.

Nevertheless, housing, water, electricity, natural gas and other fuels rose by 1.21 per cent from June, recording the largest monthly increase among the main categories.

Information and communication prices increased by 0.68 per cent, alcoholic beverages and tobacco were up by 0.23 per cent, while health and restaurants and accommodation services each rose by 0.12 per cent.

Meanwhile, educational services and insurance and financial services remained unchanged from the previous month.

Food and non-alcoholic beverages recorded the largest increase during the first seven months of 2026, rising by 4.15 per cent compared with the same period last year.

Recreation, sports and culture followed with an increase of 3.73 per cent, while restaurants and accommodation services rose by 3.69 per cent and educational services were up by 3.68 per cent.

Transport prices increased by 3.63 per cent, while housing, water, electricity, natural gas and other fuels rose by 2.2 per cent.

Elsewhere, personal care, social protection and miscellaneous goods and services increased by 1.07 per cent, while alcoholic beverages and tobacco and health each rose by 0.93 per cent. Insurance and financial services edged up by 0.07 per cent.

On the contrary, clothing and footwear prices fell by 6.68 per cent during the January-to-July period.

Information and communication declined by 2.72 per cent, while furnishings, home decoration, household equipment and routine home maintenance were down by 0.35 per cent.

Cystat’s contribution analysis, which measures the effect of each category on the overall movement of the CPI, showed that restaurants and accommodation services made the largest positive contribution to the annual change, adding 3.14 units.

Recreation, sports and culture followed with a contribution of 2.82 units, while alcoholic beverages and tobacco added 1.86 units.

Housing, water, electricity, natural gas and other fuels contributed a further 1.49 units, while personal care, social protection and miscellaneous goods and services added 0.46 units. Transport had a positive effect of 0.32 units.

These increases were partly counterbalanced by health, which made the largest negative annual contribution, reducing the index by 2.62 units.

Information and communication lowered the index by 1.69 units, while clothing and footwear reduced it by 1.05 units.

Insurance and financial services had a negative effect of 0.90 units, food and non-alcoholic beverages reduced the index by 0.56 units, and furnishings and home maintenance lowered it by 0.28 units.

Educational services also had a marginal negative effect of 0.03 units.

In the monthly comparison, housing, water, electricity, natural gas and other fuels made the largest positive contribution, adding 0.15 units to the index.

Information and communication contributed 0.03 units, while alcoholic beverages and tobacco and restaurants and accommodation services each added 0.01 units.

However, the sharp fall in clothing and footwear reduced the index by 0.68 units, making it the main factor behind July’s overall monthly decline.

Food and non-alcoholic beverages lowered the index by 0.09 units, while recreation, sports and culture and personal care, social protection and miscellaneous goods and services each had a negative effect of 0.03 units.

Furnishings and home maintenance and transport each reduced the index by 0.02 units. Health, educational services and insurance and financial services made no measurable contribution to the monthly change.

A closer look at individual goods and services showed that recreation services had the largest positive annual effect, adding 2.93 units to the CPI.

Catering services, including food and beverage services, contributed 2.76 units, while rents added 1.54 units.

At the other end of the scale, mobile communication services recorded the largest negative annual effect, reducing the index by 1.53 units.

Insurance lowered the index by 1.13 units, various other goods and services reduced it by 0.98 units, and fuels and lubricants had a negative effect of 0.68 units.

Taken together, the specific goods and services included in the analysis contributed 2.91 units to the annual movement of the CPI.

On a monthly basis, passenger transport by air had the largest positive effect, adding 0.41 units compared with June.

Electricity contributed 0.20 units, while catering services added a further 0.04 units.

However, clothing reduced the index by 0.56 units, while fuels and lubricants lowered it by 0.42 units.

Various other goods and services had a negative effect of 0.23 units, while footwear reduced the index by 0.12 units. Overall, the specific items included in the table lowered the CPI by 0.68 units during the month.