percent for 2022, by 2 percentage points to 5, 5 percent for 2023 and by 0, 2 percentage points to 2, 3 percent for 2024. energy price inflation remained extremely elevated, ( at 38. 3 per cent ), and it continues 1 / 4 bis - central bankers'speeches to be the dominant component of overall inflation. market - based indicators suggest that, in the near term, oil prices are likely to moderate, while wholesale gas prices will stay extraordinarily high. the relatively high import share of gas needed for the eu27 energy consumption, will create extensive challenges in the coming winter months, especially, in countries with gas - intensive industrial sectors. food price inflation also rose in august, ( to 10. 6 per cent ), reflecting higher input costs related to energy, disruptions of trade in food commodities, and adverse weather conditions. while supply bottlenecks have been easing, these continue to gradually feed through to consumer prices and are putting further upward pressure on inflation, as is recovering demand in the services sector. the depreciation of the euro has also contributed to the rising inflationary pressures, together with the aforementioned supply and demand factors. governing council latest meeting decision in response to these developments, in our latest meeting, the governing council of the ecb decided to raise the three key ecb interest rates by 75 basis points. this significant step frontloads the transition from the prevailing accommodative level of policy rates towards levels that will enable the timely return of inflation to our two per cent medium - term target. undeniably, the key current challenge for the ecb as well as other major central banks is raising interest rates to deal with inflation while recession risk is high. however, the risk of high inflation becoming entrenched in inflation expectations is a greater threat. the longer inflation remains elevated, the more harm it will cause to individuals and companies. while monetary policy will act decisively to restore inflation to our target, fiscal policy must be targeted in order not to counteract monetary policy and safeguard the most vulnerable people's incomes. domestic economic developments let me now turn to domestic economic developments. the cyprus economy, continued to record noteworthy gdp growth, despite the outbreak of the war. real gdp growth in cyprus expanded by about 6 percent during the first half of 2022, mainly driven by a faster than expected recovery in tourism - related activities and, to a lesser extent, by growth in information and communication activities and in professional services

. at the same time, weakness in the cyprus gdp performance could be expected to become visible over the second half of 2022 and early 2023, primarily owing to the anticipated worsening in the international economic outlook. more specifically, the impact of the war is expected to be channelled directly, via the disruption in trade of services and the rise in commodity prices, as well as indirectly, via the impact on business and consumer confidence. our exposure to russia via the export of services is the most significant vulnerability, with the most important exposure relating to financial and other business services and, to a lesser extent, tourism and transport. 2 / 4 bis - central bankers'speeches in terms of inflation, the harmonised index of consumer prices ( hicp ) reached 9, 6 percent in august 2022 compared with 3, 3 percent in august 2021. for the period january - august 2022, inflation climbed to 8 percent, compared to 1, 2 percent in the same period in 2021. the spike in the domestic inflation is mostly attributed to the significant negative impact of the war, as well as the continued consequences of the pandemic. more specifically, the energy component is the largest contributor to the surging trend of domestic headline inflation ( with around 45 % share of hicp ). we expect that our domestic short - term inflation outlook will continue to remain, overall, at very elevated levels, similar to the euro area inflation developments, amid the ongoing significant uncertainty and volatility resulting from the war. more specifically, cyprus hicp inflation for 2022 has been revised upwards in our most recent projections, now reaching 8, 4 percent compared with 7, 0 percent in the cbc june 2022 projections. banking sector n this ever changing and uncertain economic environment, the cyprus banking sector is proving resilient, exhibiting a solid and healthy financial standing. the solvency position, as measured by the common equity tier 1 ratio was edging up to 17, 5 percent in the second quarter of 2022, a level higher than the respective european average of 15, 2 percent. the liquidity coverage ratio, indicating the availability of liquid funds against deposit outflows over a 30 day stressed period, stood at the level of 320 percent in july 2022 which is more than 3 times higher than the minimum requirement of 100 percent, placing cyprus amongst the most liquid banking sectors in the union, where the average lcr amounts to 168 percent. the non - performing loan ratio has continued its downward trend despite the