Euro area inflation expectations ease as Cyprus records higher price growth

Nicosia, Cyprus. Euro area consumers became slightly more optimistic about inflation and economic growth in July, according to the European Central Bank, while Cyprus continued to record stronger price pressures than the wider euro area.

Inflation expectations

Median consumer expectations for inflation over the next 12 months fell to 2.9 per cent in July from 3 per cent in June, the ECB said.

Expectations for inflation over the following three years declined to 2.7 per cent from 2.8 per cent, while expectations five years ahead remained unchanged at 2.4 per cent.

Consumers’ perceptions of inflation over the previous 12 months also edged down to 3.5 per cent from 3.6 per cent.

The figures indicated that inflation expectations remained relatively contained across the euro area, although uncertainty about the outlook remained elevated.

Consumer differences

Uncertainty about inflation expectations over the next 12 months was unchanged and remained above the level recorded before the start of the war in the Middle East, the ECB said.

Lower-income consumers continued to report higher inflation perceptions and expectations than higher-income households. Respondents aged 18 to 34 also continued to report lower inflation perceptions and expectations than older consumers.

Cyprus inflation rate

Annual inflation in Cyprus reached 4.4 per cent in July, according to Eurostat and the Cyprus Statistical Service.

Cyprus and Bulgaria were jointly third among EU member states for annual inflation, behind Romania at 8.2 per cent and Lithuania at 5.4 per cent.

Cyprus’ inflation rate was above the euro area average of 2.9 per cent and the EU average of 3 per cent in July.