Cyprus Investment yo

Economic growth ebbs in the first quarter of 2026

GDP growth hits a 10-quarter low: Cyprus' GDP expanded 3.0% on a seasonally and working-day adjusted year-on-year basis in Q1, following 4.3% growth in the prior quarter. Q1's reading was the weakest since Q3 2023, but still one of the strongest in the euro area. A sharp acceleration in private consumption and investment drove a massive influx of imports, which reduced the contribution of the external sector, acting as a drag on overall growth. In working-day and seasonally adjusted quarter-on-quarter terms, GDP increased 0.2% in Q1, following 1.2% growth in the prior quarter.

Slowing net exports weigh on overall growth: Compared to the prior quarter's data, readings picked up for private consumption (+5.1% year on year vs +3.4% in Q4), government consumption (+4.6% vs +4.3% in Q4), fixed investment (+1.6% vs -15.1% in Q4), exports of goods and services (+10.5% vs +3.4% in Q4) and imports of goods and services (+10.4% vs -3.9% in Q4).

GDP outlook: Cyprus’s GDP growth is projected to decelerate through 2026, hitting a post-pandemic low in 2026 as a whole. While a robust labor market will partially shield real disposable income from inflation, private consumption growth will still slow due to tempering wage growth and rising prices. Net exports are expected to be a drag as export growth weakens. Conversely, public consumption will hold steady, and fixed investment is set to rebound, boosted by the full absorption of Recovery and Resilience Facility funds.

How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Cypriot investment projections for the next ten years from a panel of 4 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable investment forecast available for Cypriot investment.

Download one of our sample reports to visualize what a Consensus Forecast is and see our Cypriot investment projections.

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