Inflation in Cyprus is forecast to reach 3.6% in 2026 before easing to 2.2% in 2027, according to the European Commission’s spring forecasts, as an energy price surge driven by the Middle East conflict pushes prices higher across the eurozone.
The Commission said VAT and excise duty cuts on energy could help limit further price rises in Cyprus, while a weaker outlook for tourism may also moderate services inflation, as companies offer more competitive prices to attract visitors.
Across the EU, the Commission forecast inflation at 3.1% this year — a full percentage point above previous estimates — with energy prices cited as the primary driver. The energy shock, it said, is squeezing real household incomes and weighing on consumer spending, effectively passing the cost of the crisis to citizens.
Greece faces the steepest deterioration, with inflation forecast at 3.7% in 2026, driven by a sharp rise in energy prices following the outbreak of conflict in the Middle East in March 2026. The Commission said Greek inflation will remain above the eurozone average.
Lithuania is forecast to see the highest inflation in the group at 4.4% in 2026, up from 3.4% in 2025, with food prices also expected to rise on higher fuel, transport and fertiliser costs. Inflation there is projected to fall to 2.7% in 2027.
Elsewhere, Italy is forecast at 3.2% in 2026, with the sharp monthly rise in energy prices since March expected to feed quickly into other goods and services, before falling below 2% in 2027. The Netherlands is also forecast at 3.2% in 2026, easing to 2.5% in 2027.
Germany is forecast at 2.9% in 2026 and 2.7% in 2027. A two-month fuel tax reduction introduced in May 2026 will provide only temporary relief, the Commission noted. Slovenia is projected at 3.5% in 2026, easing to 2.5% in 2027, while Latvia is forecast at 3.6% in 2026, falling to 2.2% in 2027.
Portugal is forecast at 3.0% in 2026, easing to 2.3% in 2027, with core inflation excluding energy and food expected to grow more slowly at 2.4% in both years. Spain is projected to reach 3% in 2026 on the back of sharp energy price rises and gradual pass-through to food and industrial goods, before falling to 2.5% in 2027. France is the most stable of the group, with inflation forecast at 2.4% in 2026 and 1.8% in 2027.