Cyprus economy accelerates to 3.3 per cent growth despite global headwinds

Cyprus recorded 3.3 per cent annual economic growth in the second quarter of 2026, significantly outperforming the euro area and EU, according to Eurostat and preliminary data from the Statistical Service.

The Cypriot economy grew by 3.3 per cent compared with the second quarter of 2025, more than three times the 1.0 per cent annual growth recorded across the euro area and well above the EU’s 1.2 per cent, according to Eurostat’s latest flash estimate.

Cyprus also outperformed the European averages on a quarterly basis, with GDP increasing by 0.8 per cent between the first and second quarters, compared with 0.4 per cent in the euro area and 0.5 per cent across the EU.

The figures underline the strength of Cyprus’ economic performance compared with the broader European economy, which had seen much more modest growth in the first quarter.

Eurostat said euro area GDP had remained unchanged in the first quarter of 2026, while EU GDP increased by just 0.1 per cent.

The second-quarter figures therefore represented a clear acceleration, with euro area GDP rising by 0.4 per cent and EU GDP by 0.5 per cent compared with the previous quarter.

On an annual basis, euro area growth doubled from 0.5 per cent in the first quarter to 1.0 per cent in the second, while EU growth increased from 0.8 per cent to 1.2 per cent.

Cyprus, meanwhile, accelerated from 3.0 per cent annual growth in the first quarter to 3.3 per cent in the second.

The Cypriot economy had expanded by 4.2 per cent in the final quarter of 2025 and by 3.5 per cent in the third quarter, while annual growth stood at 3.7 per cent in the second quarter of 2025.

The latest Cypriot expansion was driven mainly by wholesale and retail trade and vehicle repairs, information and communication, financial and insurance activities, and construction, according to the Statistical Service.

The figures also put Cyprus ahead of the United States, whose economy grew by 0.4 per cent between the first and second quarters of 2026, matching the euro area rate.

US GDP increased by 2.1 per cent compared with the second quarter of 2025, however, meaning annual growth remained more than twice the euro area rate but below Cyprus’ 3.3 per cent.

Employment growth was considerably more uniform across the European economies.

The number of employed people increased by 0.1 per cent in both the euro area and EU during the second quarter compared with the previous three months.

Euro area employment had also increased by 0.1 per cent in the first quarter, while employment in the EU had remained unchanged.

Compared with the second quarter of 2025, employment increased by 0.5 per cent in both the euro area and EU.

That compared with annual employment growth of 0.5 per cent in the euro area and 0.6 per cent in the EU during the first quarter.

Eurostat’s figures therefore show a much wider gap in economic growth than in employment growth, with Cyprus expanding substantially faster than the European average despite broadly similar employment gains across the euro area and EU.

The figures for Cyprus remain preliminary, while Eurostat described its European figures as a flash estimate.