Cyprus inflation accelerated to 3.5 per cent in August, as rising fuel prices and air fares drove a sharp increase in transport costs, according to figures released on Thursday by the statistical service (Cystat).

The Consumer Price Index (CPI) rose by 0.93 points during the month, reaching 103.25 units compared with 102.32 in July.

This represented a monthly increase of 0.91 per cent, reversing the decline recorded a month earlier.

Annual inflation also climbed from 2.9 per cent in July, when lower fuel and clothing prices had pulled the index down on a monthly basis.

For the first eight months of 2026, consumer prices were 2.08 per cent higher than during the corresponding period of 2025. 

The August increase was led by transport, where prices rose by 11.36 per cent year on year and 5.13 per cent compared with July. 

Fuels and lubricants alone added 0.51 points to the monthly change in the index, while passenger transport by air contributed a further 0.29 points. 

The rise was also reflected in the figures for petroleum products, which recorded the largest increase among the main economic categories. 

Their prices were 20.31 per cent higher than in August 2025 and rose by 6.88 per cent in a single month. 

Agricultural goods also became more expensive, increasing by 5.24 per cent annually and 1.44 per cent from July. 

Meanwhile, electricity and water prices were 6.01 per cent higher than a year earlier, despite falling by 1.2 per cent during August. 

Services recorded an annual increase of 4.06 per cent and a monthly rise of 0.86 per cent. 

By contrast, industrial goods excluding petroleum products were 0.41 per cent cheaper than in August last year and declined by a further 0.1 per cent from July. 

Among the main areas of household spending, housing, water, electricity, natural gas and other fuels recorded the second-largest annual increase, with prices rising by 6.86 per cent. 

However, the category declined slightly from July, falling by 0.13 per cent as lower electricity prices provided some relief. 

Food and non-alcoholic beverages were 3.81 per cent more expensive than a year earlier and increased by 0.7 per cent during August. 

Prices in restaurants and accommodation services rose by 3.42 per cent annually, while recreation, sports and culture increased by 3.23 per cent. 

Educational services were up by 3.52 per cent compared with August 2025 but were unchanged from the previous month. 

More moderate increases were recorded in health, at 1.03 per cent, alcoholic beverages and tobacco, at 0.88 per cent, and personal care, social protection and miscellaneous goods and services, at 0.68 per cent. 

Nevertheless, several categories continued to record lower prices. 

Clothing and footwear registered the largest annual decline, falling by 6.29 per cent, while prices dropped by another 1.52 per cent between July and August. 

Information and communication costs were 2.72 per cent lower than a year earlier, although they increased by 0.45 per cent during the month. 

Furnishings, home decoration, household equipment and routine home maintenance also declined, with prices down by 0.84 per cent annually and 0.11 per cent from July. 

At product and service level, the largest upward contributions to the annual change came from recreation services, catering services and rents. 

These increases were partly offset by lower costs for mobile communication services, insurance and medicines. 

For the monthly change, fuel and air fares provided most of the upward pressure, while vegetables also made a smaller positive contribution. 

Clothing had the strongest downward effect, reducing the index by 0.10 points, followed by electricity, which lowered it by 0.05 points. 

The figures show that the acceleration from July was driven principally by the renewed increase in fuel and travel costs, rather than price rises across the entire consumer basket. 

It should be noted that Cystat’s national CPI figure is separate from the Harmonised Index of Consumer Prices flash estimate published by Eurostat earlier this week.

That measure placed Cyprus inflation at an estimated 5.2 per cent in August, the second-highest rate in the euro area.