Depends what you mean by expensive, really - prices in Cyprus have certainly risen over the last couple of years, but so have everyone else's. It's still cheaper than eating & drinking out in the UK. Be wary in Paphos, though - there are a lot of unscrupulous bar and restaurant owners, and it's easy to get ripped off if you don't keep your wits about you. Actually that's true of other parts of Cyprus too, but Paphos is definitely the worst offender. Avoid the very touristy places and you'll be OK.