lowest inflation — Cyprus posted the lowest inflation rate in the European Union in December 2025, with figures showing an annual rate of just 0.1 per cent. This places Cyprus firmly at the bottom of the EU inflation rankings, as price pressures continue to ease across the euro area and the bloc.
Lowest inflation: Deceleration of Euro Area Inflation
The latest data from Eurostat indicates a broader trend of declining inflation rates within the euro area. In December, the annual inflation rate dropped to 1.9 per cent, down from 2.1 per cent in November. This marks a significant decrease from the 2.4 per cent inflation recorded a year earlier, further showcasing the easing of price pressures across Europe.
Comparative Inflation Rates Across the EU
While Cyprus leads with its remarkably low rate, it is joined by France, which recorded an inflation rate of 0.7 per cent, and Italy at 1.2 per cent. These figures contrast sharply with Romania, which faced the highest annual inflation rate in the EU at 8.6 per cent. Following Romania, Slovakia and Estonia reported rates of 4.1 per cent and 4.0 per cent, respectively.
Trends in Inflation Among EU Member States
Data reveals that in December 2025, annual inflation fell in eighteen EU member states, reflecting a general decline in price pressures. However, three member states maintained stable inflation rates, while six others experienced an increase compared to the previous month.
Factors Influencing Inflation Rates
Within the euro area, services emerged as the primary contributor to the annual inflation rate, adding 1.54 percentage points. Food, alcohol, and tobacco followed, contributing 0.49 percentage points. In contrast, energy prices negatively impacted inflation, contributing -0.18 percentage points.
Limited Price Pressures in Cyprus
The December inflation figures highlight Cyprus’s ongoing experience of limited price pressures, particularly when compared to higher-inflation economies in eastern Europe. This stability in prices contrasts sharply with the economic challenges faced by some neighbouring countries, underscoring the unique economic position of Cyprus within the EU.
