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Cyprus records first deflation in over four years in May

Cyprus recorded deflation in May 2025 for the first time in more than four years, with the annual inflation rate turning negative at -0.2%, according to data released by CySTAT. The last time the Consumer Price Index (CPI) recorded a year-on-year decrease was in March 2021, when inflation stood at -0.72%.

The Consumer Price Index rose slightly in May 2025, reaching 117.57 units compared to 117.31 units in April 2025—an increase of 0.26 points on a monthly basis, however, on a yearly basis, prices were down.

The most significant annual price increases were recorded in Agricultural Products (+4.7%) and Services (+3.5%), while declines were seen in Petroleum Products (-12.8%) and Electricity (-8.6%). The drop in energy prices played a key role in the deflationary trend.

The most notable annual declines were observed in Transport (-6.6%) and Clothing and Footwear (-5.3%), while notable increases were recorded in Restaurants and Hotels (+4.9%), Recreation and Culture (+4.0%), and Education (+3.7%).

On a monthly basis, compared to April 2025, the largest increases were in Clothing and Footwear (+2.4%), while Transport registered the sharpest decrease (-2.4%).

The main contributors to the annual deflation included a significant negative impact from Petroleum Products (-1.47 units) and Transport (-1.21 units). On the other hand, Restaurants and Hotels (+0.52 units) and Food and Non-Alcoholic Beverages (+0.46 units) provided upward pressure.

(Source: CNA)

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