Cost of living

The Finance Ministry is preparing additional cost-of-living measures for approval by the Council of Ministers, but no details have been released on what the package will include, how much it will cost, who will qualify or when relief will begin. Diesel was averaging around €1.95 a liter on Sept. 21, with prices at some petrol stations already passing the €2 mark, while Brent crude stayed close to $105 a barrel as the Middle East conflict pushed up international energy prices. For households in Cyprus, filling a 50-liter diesel tank now costs close to €100, before higher transport costs work through the rest of the economy.

Industrial producer prices in Cyprus rose 0.2 per cent month on month in August, following a 1.8 per cent increase in July, according to Eurostat, while prices in both the euro area and the EU climbed 1.9 per cent. On an annual basis, Cyprus' industrial producer prices were 4.2 per cent higher, compared with rises of 8.2 per cent in the euro area and 8.0 per cent across the EU. Separate Cystat data show Cyprus' Industrial Turnover Index rose 5 per cent year on year in July to 168.8 units, with domestic market demand up 7.4 per cent, though the figures point to a widening gap between domestic demand and export performance. For people living in Cyprus, the data indicate energy-driven cost pressure building across Europe, with the island's monthly increase smaller than the euro area average.

Inflation in Cyprus accelerated to 3.7 per cent in September from 3.5 per cent in August, according to Cystat. The Consumer Price Index rose 0.74 per cent month-on-month to 104.01 units, and was up 2.3 per cent over the first nine months of 2026 compared with the same period in 2025. Petroleum products rose 25.8 per cent year-on-year, while electricity and water increased 11.2 per cent, keeping pressure on household budgets. The figures come as the government implements a new €70 million package of measures, taking total new and existing support to about €160 million.

Inflation in Cyprus reached 3.7% in September, with consumer prices rising 0.74% from August alone, according to figures released Thursday by the Statistical Service. Petroleum products cost 25.8% more than a year earlier, the electricity and water category rose 11.2%, transport prices overall increased 11.9%, and the broader category covering housing, water, electricity and other fuels climbed 9.6%. The September annual rate was above the 2.3% average recorded over the first nine months of the year. For households, the sharpest increases are in expenses that are hard to cut — commuting, school runs and small-business deliveries — leaving less money for everything else; a €1,000 basket last September would cost about €1,037 this September.

The government in late September unveiled a €70 million relief package, cutting heating oil tax by 5.3 cents per litre from November 1, extending electricity subsidies, applying zero VAT to more essential goods, reducing VAT on residential photovoltaic systems and adding aid for vulnerable households and mountain residents. Economic observers say the measures fail to correct underlying problems, and consumers would feel less pain had baseline energy prices been brought down.

A household that paid about €960 to fill its heating-oil tank last year could face a cost of roughly €1,610 this winter, an increase of around €650, according to industry representatives' estimates. Heating oil has reached approximately €1.60 a litre after rising by about 56 cents over the past three months. The average price of 95-octane petrol has climbed to around €1.70 a litre and diesel is hovering near €2, up about 32 cents and 49 cents respectively over three months, so filling a 50-litre petrol tank now costs roughly €16 more and a diesel fill close to €25 more. For families in Nicosia, the mountains and other colder parts of the island, postponing the purchase may not be much of an option once temperatures begin to fall.

Cyprus' construction production rose 1.1 per cent year-on-year in the second quarter of 2026, with the production index reaching 130.28 units against a 2021 reference value of 100 units, up from 128.83 units a year earlier, Cystat said. Output prices in construction increased 4.9 per cent, with the price index at 132.48 units compared with 126.32 units in the same quarter of last year, and a quarterly rise of 2.5 per cent from the first quarter of 2026. In the first half of the year, production grew 1.4 per cent while output prices rose 4.7 per cent, so prices continued to rise considerably faster than construction activity.