Cyprus inflation holds at 3% despite government's VAT reduction efforts

Cyprus's inflation rate remained steady at 3% in January, despite the government's efforts to reduce VAT on essential goods until the end of 2025. This was an increase from 2.1% in January 2024 but lower than the 6.8% recorded in January 2023. The inflation rate in Cyprus was in line with the overall trend in the eurozone, where inflation edged up slightly to 2.5%. Energy prices rose by 1.8%, compared to just 0.1% in December.

Cyprus is now among eight EU countries with inflation rates between 3% and 5%, with Croatia leading this group at 5%. Food inflation across the eurozone showed signs of easing, dropping from 2.6% in December to 2.3% in January. Similarly, services inflation declined slightly from 4% to 3.9%. On the other hand, Ireland had the lowest inflation rate in the eurozone at 1.5%, followed by Finland, Italy, Malta, and France with lower rates as well.