Inflation rose to 3.1% but among lowest in EU

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Harmonised inflation in August returned to an upward trajectory of 3.1%, primarily due to increased food prices.

It ended a continuous 12-month decline since inflation peaked in July 2022 to a record high of 10.6%.

Despite the increase, Cyprus’ inflation is the fourth lowest in the 27-member bloc.

According to the Cyprus Statistical Service, the Harmonised Consumer Price Index increased by 3.1% in August from August 2022, when it had risen by 9.6% (the second-highest historically).

In July 2023, harmonised inflation recorded the lowest annual increase since July 2021, dropping to 2.4%.

For the eight months to August, there was a 4.4% increase compared to the previous year.

Compared to August 2022, the categories of Food and Non-Alcoholic Beverages (10.4%) and Restaurants and Hotels (5.6%) showed the largest changes.

Compared to July 2023, the largest change was recorded in the category of Transport (3.5%).

For January to August 2023, the largest changes were observed in the categories of Food and Non-Alcoholic Beverages (9.3%), Restaurants and Hotels (6.6%), and Housing, Water, Electricity, Gas, and Other Fuels (6.4%).

Compared to the previous month, the category of Energy (2.1%) recorded the largest change.

The euro area’s annual inflation rate was 5.2% in August, down from 5.3% in July. A year earlier, the rate was 9.1%.

The European Union’s annual inflation was 5.9% in August 2023, down from 6.1% in July. A year earlier, the rate was 10.1%.

The lowest annual rates were registered in Denmark (2.3%), Spain and Belgium (both 2.4%).

And the highest annual rates were recorded in Hungary (14.2%), Czechia (10.1%) and Slovakia (9.6%).

Compared with July, annual inflation fell in 15 Member States, remained stable in one and rose in 11.

In August, the highest contribution to the annual euro area inflation rate came from services (+2.41 percentage points, pp), followed by food, alcohol & tobacco (+1.98 pp), non-energy industrial goods (+1.19 pp) and Energy (-0.34 pp).