Inflation: The daily price fire burning households and businesses

Cyprus is facing a persistent inflationary crisis, with the harmonized Consumer Price Index reaching 4.4% in July. Households and small businesses are struggling due to rising energy costs, specifically oil dependence and electricity bills. While the government attempts to provide targeted support, it is constrained by fiscal commitments to the European Commission. Economists warn that a potential interest rate hike by the European Central Bank could further exacerbate the situation, creating a challenging economic cycle of high debt and reduced consumption.