fuel prices — fuel prices — Falling fuel and energy prices have kept inflation in Cyprus at a minimal rate of just 0.1 per cent in February 2026. This stability comes as the Cyprus Statistical Service (Cystat) reported a small decline in the consumer price index (CPI), reflecting a balance between decreasing energy costs and rising prices in other sectors, particularly services.
- On a month-to-month basis, from January to February 2026, electricity and water costs fell by 2.5 per cent, contributing to the overall decrease in the CPI.
- As Cyprus navigates these economic fluctuations, the interplay of domestic and global factors will be essential in shaping the future of inflation and consumer prices.
Fuel prices: Consumer Price Index Shows Minor Decrease
The consumer price index for February 2026 decreased by 0.12 points, settling at 99.86 units, down from 99.98 units in January 2026. Year-on-year, inflation reflects a modest increase of 0.1 per cent, indicating that while certain sectors are experiencing price pressures, overall inflation remains controlled.
Sector Performance Highlights
A closer look at the various economic categories reveals significant fluctuations. Agricultural products recorded the largest year-on-year increase of 4.2 per cent compared to February 2025. Conversely, the largest decline was in electricity and water, which saw a notable drop of 9.3 per cent.
On a month-to-month basis, from January to February 2026, electricity and water costs fell by 2.5 per cent, contributing to the overall decrease in the CPI.
Shifts in Consumer Spending
Analysis of consumer spending patterns indicates a mixed bag of changes within the CPI categories. Clothing and footwear saw a decrease of 6.8 per cent compared to February 2025. In contrast, the costs associated with restaurants and accommodation services rose by 4.7 per cent, while educational services increased by 3.7 per cent. Transport costs, however, dropped by 3.7 per cent.
When evaluating month-to-month changes, clothing and footwear saw a slight increase of 0.8 per cent, while recreation, sports, and culture experienced a decrease of 0.5 per cent. Additionally, food and non-alcoholic beverages fell by 0.4 per cent.
Notable Contributions to Inflation Changes
In examining the contributions to the annual CPI change, restaurants and accommodation services had the most significant positive impact, contributing 3.21 units. Other sectors with noteworthy contributions included recreation, sports, and culture, which added 2.70 units, and alcoholic beverages and tobacco, contributing 1.86 units.
On the downside, health services had the largest negative impact, subtracting 2.64 units from the CPI, followed by information and communication and clothing and footwear, which diminished the index by 1.60 and 1.15 units, respectively.
Potential Threats to Current Trends
Despite the current low inflation rates, economists caution that these figures may be at risk due to international events, particularly the escalating crisis in Iran. The potential for rising global oil prices and disruptions in supply chains could quickly alter the landscape, reversing the recent trends in energy and transportation costs.
As Cyprus navigates these economic fluctuations, the interplay of domestic and global factors will be essential in shaping the future of inflation and consumer prices.
