cyprus economy — cyprus economy — Cyprus’ economy is holding steady as GDP grows by 3 per cent year-on-year in the first quarter of 2026. This growth has been bolstered by household spending, robust exports, and vibrant activity across key service sectors, according to preliminary data released by the Cyprus Statistical Service (Cystat) on Tuesday.
- Moreover, financial and insurance activities increased by 2.4 per cent, with real estate activities showing a growth of 2.1 per cent.
In real terms, the gross domestic product (GDP) adjusted for seasonal fluctuations and working days also saw a modest rise of 0.2 per cent compared to the last quarter of 2025. This indicates a consistent upward trend in economic performance.
Cyprus economy: Key Sectors Driving Growth
The main drivers of this growth include wholesale and retail trade, transport, accommodation and food services. Additionally, the information and communication sector, alongside financial and insurance activities, has contributed significantly to the economy’s expansion.
Looking at the production side, the information and communication sector recorded the most substantial annual increase, growing by 5.4 per cent. This was closely followed by the construction industry, which rose by 4.9 per cent, while the combined sector of trade, transport, accommodation, and food services experienced a 4.4 per cent increase.
Moreover, financial and insurance activities increased by 2.4 per cent, with real estate activities showing a growth of 2.1 per cent.
Consumer Spending Fuels Economic Activity
On the expenditure front, private consumption has emerged as the primary pillar of growth. Spending by households and non-profit institutions serving households surged by 5.1 per cent compared to the first quarter of 2025. Government consumption also saw an increase of 4.6 per cent, leading to a total final consumption expenditure rise of 4.9 per cent year-on-year.
Strong Export Performance
The external sector has displayed remarkable strength, with exports of goods and services climbing by 10.5 per cent to reach €8.68 billion in real terms. Imports mirrored this demand, increasing by 10.4 per cent to €8.18 billion, reflecting ongoing robust demand across the economy.
Investment Trends and Challenges
However, investment figures revealed a more subdued performance. Gross fixed capital formation increased by 1.5 per cent year-on-year but fell by 5.2 per cent compared with the previous quarter. Excluding ships and aircraft, investment declined by 2.3 per cent annually, indicating softer activity in sectors less influenced by large transport equipment transactions.
