cyprus economy — cyprus economy — Cyprus’ economy continues to show a mixed performance in early 2026, marked by strong growth in construction and vehicle registrations while grappling with declining exports and a significant drop in tourist arrivals, according to the Cyprus Statistical Service (Cystat).
Cyprus economy: Positive Trends in Construction and Manufacturing
Among the bright spots in the economy, manufacturing production increased by 0.5 per cent from January to March 2026 compared to the same period last year. This modest growth is complemented by a notable surge in construction activity, with the total area covered by authorised building permits reaching 661,400 square metres in January and February. This figure represents an impressive year-on-year increase of 54.9 per cent, signalling strong demand for new developments.
Growth in the Automotive Sector
The automotive market also experienced a robust performance, with total vehicle registrations rising by 15.1 per cent during the January to April period, reaching 18,570 vehicles. This includes a significant increase in private saloon car registrations, which climbed by 18.2 per cent to 12,866 units, along with light goods vehicle registrations that rose by 13.4 per cent, totalling 1,781 units.
Inflation Remains Manageable
Despite these positive indicators, inflation has remained relatively subdued. The Consumer Price Index recorded a rise of 1.1 per cent from January to April 2026 when compared to the same timeframe in the previous year. This stability in prices may offer a sense of relief to consumers amidst fluctuating economic conditions.
Mixed Trade Performance
Trade figures reveal a mixed landscape, with imports continuing to rise while exports declined. The total value of imported goods reached €4.697 billion in the first four months of 2026, marking a 4.8 per cent increase compared to the same period in 2025. Conversely, the export figures showed a concerning trend, with the total value falling to €1.639 billion, a 9.3 per cent decline year-on-year.
Tourism Faces Significant Challenges
Tourism, a cornerstone of Cyprus’ economy, has faced substantial challenges in early 2026. Tourist arrivals totalled 710,370 from January to April, a sharp decrease from 865,326 during the same period last year, resulting in a year-on-year decline of 17.9 per cent. This downturn raises concerns about the sector’s recovery as the country navigates through various economic pressures.
