The ongoing conflict in Ukraine is expected to restrict the gross domestic product (GDP) of Cyprus to 2.4 percent in 2023, compared to a projected growth of 4.9 percent this year, the Economics Research Center of the University of Cyprus (CypERC) said on Monday.

It said in a statement that the negative effects of the conflict appear to be unfolding more slowly than previously thought, cutting the expected growth for 2023 by 0.4 percentage points relative to its July forecast.

"The downward revision was driven by several factors, including sustained upward price pressures, the deterioration of economic sentiment in the European Union (EU), the weakening of business confidence in services in Cyprus, and the uptick of lending interest rates in the eurozone," it said.

A possible further escalation of the conflict could amplify upward pressures on commodity prices, prolong high inflation and deepen the energy crisis in Europe, increasing the cost of living further and negatively affecting growth, it said.

"Lower-than-projected growth rates in Cyprus may arise if the slowdown in the EU and the United Kingdom (UK) turns out to be more severe than expected," it added.

The CypERC said that consumer price index inflation in the country is forecast at 8.6 percent and 3.4 percent for 2022 and 2023, respectively.

This year's high inflation is the direct result of strong increases in international prices of energy and food, in combination with robust economic activity, it added.

Commenting on the rising energy prices in Cyprus, the President of the Cyprus Consumers' Union, Lucas Aristodemou, told state CyBC radio on Monday that they will cause misery to tens of thousands of people during the winter season, from mid-November to the end of March.

"Their household expenses will skyrocket as heating fuel prices are up 45 percent compared to the previous winter and the price of electricity has also gone up by about 30 percent," Aristodemou said.