Strong consumer spending and a booming technology sector pushed Cyprus’ Gross Domestic Product (GDP) up by 3.0% year-on-year in the first quarter of the year.
According to preliminary Quarterly National Accounts data published by the Statistical Service of Cyprus (Cystat), the island’s economy also managed a 0.2% quarter-on-quarter expansion when measured in real terms and adjusted for seasonal variations and working days, signaling sustained momentum heading into the summer.
Tech and Construction Lead Sector Outperformance
The economic expansion was broad-based, with service industries, hospitality, and digital enterprise acting as the primary catalysts for growth.
Annual Sector Growth Rates (Production Approach):
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Information & Communication: +5.4% (The island’s fastest-growing sector)
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Construction & Real Estate Development: +4.9%
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Trade, Transport, Accommodation & Food Services: +4.4%
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Financial & Insurance Activities: +2.4%
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Real Estate Activities: +2.1%
Wholesale and retail trade, tourism, and financial services also contributed heavily to the positive baseline, proving the resilience of Cyprus’ core service-driven economy.
The Expenditure Breakdown: Domestic Consumption vs. Subdued Investment
An analysis of the expenditure side reveals that domestic household demand remains the primary engine of the Cypriot economy, though corporate capital investment has taken a conservative step back.
Household Spending (+5.1%) + Government Spending (+4.6%) ──> Total Consumption (+4.9%)
Concurrently, the island’s external sector demonstrated immense strength. International exports of goods and services surged by 10.5% to reach a real value of €8.68 billion, closely mirrored by a 10.4% rise in imports, which climbed to €8.18 billion.
In contrast, long-term investment activity presented a much more subdued outlook. While gross fixed capital formation managed a minor 1.5% increase year-on-year, it actually dropped by 5.2% when compared directly to the final quarter of 2025. Furthermore, when volatile assets like registrations for ships and aircraft are excluded, core domestic investment fell by 2.3% on an annual basis, indicating a visible slowdown in capital deployment across major industries.
Source: Stockwatch.com.cy