Eurobank research flags growing concern over Cyprus current account deficit

Cyprus is facing a widening external account imbalance, according to a recent analysis by Eurobank Research, which warns that despite continued economic growth, the country's external position deserves closer attention. Revised data from the Central Bank of Cyprus (CBC) indicates that the 2025 current account deficit reached 8.8% of GDP, a significant increase from the previously estimated 6.4%. Conversely, the 2024 deficit was revised downward to 5.5% from 8.2%.

In absolute terms, the 2025 deficit rose by €870 million to a total of €3.21 billion. This shift was largely driven by a €1.42 billion increase in the primary income deficit, particularly regarding net investment income, along with upward revisions to the goods deficit and net transfers. While these figures were partially offset by an €855 million increase in the services surplus, primarily from IT and telecommunications sectors, indicators for the first half of 2026 suggest that the negative trend is continuing. Eurobank emphasizes the need to diversify and strengthen external revenue sources to mitigate these risks.