Cyprus' inflation rate for August 2023 stood at 3.1%, up from 2.4% in July 2023. This marks a significant drop from August 2022 when the rate was a high 9.6%, Eurostat reports.

A broader look at the Eurozone in August 2023 shows an inflation rate of 5.2%, slightly reduced from July's 5.3%. This rate was also lower than the 9.1% recorded in August 2022. For the entire European Union, the August 2023 inflation rate was 5.9%, down from 6.1% in the preceding month, and a marked decrease from the 10.1% of August 2022.

Among EU countries, Denmark had the lowest inflation rate at 2.3% in August 2023, with Spain and Belgium close behind at 2.4%. On the higher end of the spectrum, Hungary faced the steepest rate at 14.2%, followed by Czechia (10.1%) and Slovakia (9.6%).

From July to August 2023, fifteen EU member states saw a drop in their annual inflation rates, one remained unchanged, and eleven witnessed an increase.

Delving into the specifics of the inflation contributors in August, services had the most significant impact on the Eurozone inflation rate at +2.41 percentage points. This was followed by food, alcohol, and tobacco (+1.98 pp), non-energy industrial goods (+1.19 pp), and energy (-0.34 pp).

A key note is the rise in food prices, which reversed a year-long declining trend in harmonised inflation. In fact, July 2022 saw a record 10.6% spike.

The Cyprus Statistical Service sheds light on more local details. The Harmonised Consumer Price Index in Cyprus rose by 3.1% in August 2023 year-on-year. This follows a significant 9.6% rise in August 2022. July 2023 saw the smallest annual inflationary growth since July 2021, recorded at 2.4%.

Examining the January to August 2023 span, there was a 4.4% increase in inflation when compared to the same period in 2022.

Category-specific changes in Cyprus include:

• Largest year-on-year changes in August 2023: Food and Non-Alcoholic Beverages (10.4%), Restaurants and Hotels (5.6%).

• Largest month-on-month change in August 2023: Transport (3.5%).

• Notable changes from January to August 2023 year-on-year: Food and Non-Alcoholic Beverages (9.3%), Restaurants and Hotels (6.6%), and Housing and Utilities (6.4%).

Lastly, the most significant changes in August 2023, relative to the previous year, were in the Food-Alcoholic Beverages-Tobacco (8.8%) and Energy (-7.6%) categories. Comparing August to July 2023, the Energy category saw the most significant shift, recording a 2.1% change.