Filenews 5 February 2025
Inflation has been stuck at 3% for two consecutive months in Cyprus and does not seem to be coming off easily. Although we are going through a period when government measures are in place for a zero VAT rate by the end of 2025 on a number of products.
The harmonised inflation index data released by Eurostat on Monday came as an unpleasant surprise. The index in January was at 3% year-on-year, well above the level of 2.1% in January 2024, but well below the level of 6.8% in January 2023.
In the euro area, inflation also rose to 2.5% from 2.4% in December. The data released by Eurostat show that Cyprus is in the group of 8 countries where harmonised inflation is in a range between 5% and 3%, namely: Croatia 5%, Belgium 4.4%, Slovakia 4.1%, Austria 3.5%, Lithuania 3.4%, Greece 3.1%, Latvia and Cyprus 3%.
Harmonised inflation above 2% was recorded in Slovenia 2.3%, Luxembourg 2.4%, Portugal 2.7%, Germany and Estonia 2.8%, Spain and the Netherlands 2.9%. The countries with the lowest harmonised inflation for January 2025 were Ireland 1.5%, Finland 1.6%, Italy and Malta 1.7%, France 1.8%.
In the euro area, energy prices rose 1.8% from a 0.1% increase in December, while food inflation – with the food, alcohol and tobacco index rising 2.3% from 2.6% – and services price inflation marginally fell to 3.9% from 4%.
