Central Bank of Cyprus releases June 2026 economic report

The Central Bank of Cyprus (CBC) reported that the Cypriot economy grew by 3.8% in 2025, driven by strong domestic demand, private consumption, and investments. However, the June 2026 economic bulletin projects a slowdown in GDP growth to 2.5% for 2026, primarily due to the geopolitical situation in the Middle East. This represents a downward revision of 0.2 percentage points compared to the March 2026 forecasts. Economic growth is expected to recover to 2.9% in 2027 and 3.1% in 2028. Inflation, which was 0.8% in 2025, accelerated to 3% in April 2026, largely due to rising energy costs. While the potential US-Iran agreement is viewed as a positive development, the CBC notes it remains subject to further negotiations. Future risks include continued global uncertainty, energy price volatility, and potential disruptions to the tourism and services sectors.