The Cypriot economy recorded the highest growth rate across the eurozone in the first quarter of 2026, at 0.8%, three times higher than the European average of 0.3%, despite a recent slowdown. However, the impact of the crisis is expected to become apparent in the coming months. The Cypriot economy continues to draw momentum from last year’s performance, but the second and especially the third quarter – during which 70% of tourist arrivals take place between May and September – will show the extent to which Cyprus has been affected by the Middle East crisis.
More specifically, according to data released on Wednesday by the Statistical Service and Eurostat, the seasonally adjusted GDP growth rate for the first quarter of 2026 is positive and estimated at 3% compared with the corresponding quarter of 2025. In the fourth quarter of 2024, annual GDP growth stood at 4.3%, while in the first quarter of 2025 it was 3.6%.
Waiting to see
Economist Marios Kliridis, speaking to Politis, said it is a positive development that the Cypriot economy is recording the highest growth rate in the EU, noting that this confirms its resilience to successive crises due to its small size.
“However,” he noted, “we will need to wait for the coming months to see how the trend develops, particularly in relation to possible changes in consumer behaviour, such as a potential reduction in consumption due to uncertainty, and once increases in energy prices are incorporated.”
Analysts abroad estimate that the full impact of the war in the Middle East has not yet been reflected in the figures. The coming months will be decisive.
Call to stakeholders
The Minister of Finance, Makis Keravnos, said in a written statement that the data confirm the government’s sound economic policy, underlining the resilience of the economy even during this period of heightened uncertainty and armed conflicts.
At the same time, he called on economic stakeholders “to continue and strengthen economic activity, with outward orientation, enthusiasm and by leveraging our comparative advantages”.
Growth at 2.7% in 2026
Following the publication of the data, the Ministry of Finance estimates growth at 2.7% for the whole of 2026.
“The continuation of prudent and disciplined fiscal policy and economic management by the government will contribute to the resilience of the Cypriot economy, allowing Cyprus to continue recording medium‑term growth rates above 3%,” the Ministry of Finance said in a statement.
At the forefront
“Cyprus is at the forefront of European growth, with a stable, reliable economy capable of creating prospects for businesses, workers and society. A prospect that allows us to invest meaningfully in health, education, housing policy and the welfare state,” President of the Republic Nikos Christodoulides stressed in a written statement.
