According to the latest Consumer Price Index (CPI) report from the Central Statistical Office (CSO), this sub-2% level represents a major cooling from the 4.0% peak seen as recently as February 2025.
This trend offers much-needed relief to both consumers and businesses, signaling that the “Agape” budget and current fiscal policies may be achieving their goal of price stabilization.
Key Drivers of the Decline
The monthly decline was primarily influenced by a 0.1% month-on-month drop in prices. Several key sectors contributed to this easing. Food prices remained subdued with a modest annual inflation rate of just 0.2%. While bread and cereals saw slight decreases, other items like fruit (up 9.9%) and oils/fats (up 7.6%) prevented a further drop.
The alcohol and tobacco sector saw a dramatic decrease from 11.8% in February 2025 to just 4.7% this year, largely due to slower price increases in spirits and beer.
Inflation in the health sector fell significantly from 4.4% to 0.5%, reflecting more stable pricing in medical services.
Costs in the transport sector decreased by 0.4% month-on-month, driven largely by a 2.6% decline in fuel prices.
Countervailing Pressures
While the overall trend is downward, some sectors continue to exert upward pressure, such as the Housing and Utilities category which remains the largest contributor to the 1.9% inflation rate, driven by electricity, water, and rental costs.
Clothing and Footwear category contributed 0.3 percentage points to the headline figure.
Unlike other sectors, education saw an accelerated inflation rate of 5.8%, attributed to seasonal increases in school fees and materials.