Central Bank of Cyprus reports Q1 2026 external sector data

The Central Bank of Cyprus released preliminary data for the first quarter of 2026, indicating a deterioration in the country's external economic position. The current account deficit expanded to €1.27 billion from €1.01 billion in the same period of 2025; when adjusted for special purpose entities (SPEs), the deficit reached €1.37 billion. This trend was largely driven by a secondary income deficit and reduced net exports in services, specifically financial and telecommunications sectors. Despite these deficits, net financial inflows rose to €1.14 billion due to shifts in portfolio and other investments. The international investment position saw its net liability position widen to €28.31 billion by the end of March 2026. Gross external debt increased by approximately €1.5 billion during the quarter. However, the report noted that improvements in the goods balance and a smaller primary income deficit helped partially offset these negative trends. These statistics provide an overview of the challenges currently facing the Cypriot external balance sheet.