The inflation rate was measured at 1.9 per cent on an annual basis, primarily attributed to a reduction in food prices. According to the Cyprus Statistical Service (Cystat), the Consumer Price Index (CPI) and consequently the inflation rate decreased by 0.34 units, settling at 114.38 units compared to 114.72 units in May 2023. This inflation rate represents a 1.9 per cent increase from June 2022, marking the lowest inflation percentage since May 2021. However, it should be noted that the cost of living in Cyprus remains high even after the recent drop in inflation. Furthermore, it is also worth noting that Cyprus faced a historically high inflation rate of 10.86 per cent in July 2022. 

The current inflation rate of 1.9 per cent aligns with the target set by the European Central Bank (ECB) for the Eurozone, which aims to maintain inflation close to and below 2 per cent. Analysing the period from January to June 2023, the CPI recorded a 4.6 per cent increase compared to the same period last year, reflecting a sustained upward trend.

Among the economic categories, agricultural products showed the highest positive change, with a significant increase of 10.9 per cent. Conversely, petroleum products experienced the most substantial negative variation, dropping by 22.2 per cent. In comparison to the previous month, the electricity category witnessed the most significant change with a negative percentage of 5.2 per cent.

In a year-on-year comparison with June 2022, the Statistical Service revealed that the highest positive variation was observed in the category of Food and Non-Alcoholic Beverages, which experienced a substantial increase of 10.1 per cent. Conversely, the category of Transport recorded the most significant negative change with a decrease of 10.3 per cent. When compared to May 2023, the largest fluctuation was observed in the category of Housing, Water, Electricity, and Gas, which showed a negative change of 2.3 per cent.

Regarding the January-June 2023 period, in comparison to the corresponding period of the previous year, the categories of Housing, Water, Electricity, and Gas (9.7 per cent) and Food and Non-Alcoholic Beverages (8.8 per cent) demonstrated the most prominent fluctuations. The category with the most substantial impact on the CPI’s June 2023 variation compared to June 2022 was Food and Non-Alcoholic Beverages, contributing positively with 2.08 units. Conversely, the category of Transport had the most significant negative influence, contributing -1.98 units. The category of Housing, Water, Electricity, and Gas had the highest negative impact on the CPI’s month-on-month variation, contributing -0.36 units. 

In terms of year-on-year comparisons, Petroleum Products had the most significant impact on the June 2023 CPI variation, contributing -2.80 units. Finally, the Electricity category had the highest negative influence, contributing -0.29 units compared to the previous month.