Cyprus Business Now: economic slowdown, startups, fuel, shipping, Selk, DCO

Business & economy wrap-up from the day beforeDigital Cooperation Organisation (DCO) Secretary-General Deemah AlYahya used her visit to Cyprus to strengthen a series of international and local partnerships, underlining the island’s growing role as an emerging digital hub and highlighting the benefits of its membership in the organisation. Cyprus is a member of the DCO, an international multilateral organisation focused on promoting inclusive growth in the digital economy and advancing what it describes as digital prosperity for all. On the sidelines of Cyprus’ “Shaping the Next Digital Frontier” conference, AlYahya held a number of meetings aimed at deepening cooperation in areas ranging from digital investment and artificial intelligence to connectivity and digital infrastructure. A key part of the visit involved discussions with Invest Cyprus chairman Evgenios Evgeniou, with whom AlYahya reviewed the progress achieved through the DFDI Cyprus initiative. The Central Bank of Cyprus (CBC) on Friday revised down its forecasts for economic growth in 2026 and 2027, citing the continuing war in the Middle East and warning that risks remain skewed towards weaker growth and higher inflation. Under its June 2026 projections, the central bank lowered its forecast for gross domestic product (GDP) growth in 2026 by 0.2 percentage points to 2.5 per cent and reduced its estimate for 2027 by 0.1 percentage points to 2.9 per cent compared with its projections published in March. The CBC also now expects unemployment to rise by 0.1 percentage points to 4.6 per cent in 2026. At the same time, it forecasts that inflation will surge by 0.5 percentage points to 3.2 per cent in 2026. The central bank maintained its March forecast for core inflation, which excludes volatile energy and food prices, at 2.3 per cent for 2026. In its projections for Cyprus’ main macroeconomic indicators covering the period from 2026 to 2028, the central bank said its baseline scenario assumes that the conflict will continue until the final quarter of 2026 before gradually easing. Central Bank of Cyprus (CBC) governor Christodoulos Patsalides has called for the introduction of a standalone and compulsory financial literacy course in schools, arguing that stronger financial education is essential to prepare young people for the challenges of an increasingly complex economic environment. In an article entitled “Investing in the financial literacy of the new generation”, the governor said that the issue of financial education and its role in shaping responsible attitudes and behaviours has become increasingly prominent in public debate in recent years. He said this attention is fully justified. Patsalides pointed out that Cyprus consistently ranks among the countries with the lowest levels of financial literacy in the European Union. He added that young people record the weakest performances among all age groups. Referring to findings from the Organisation for Economic Cooperation and Development’s 2023 survey on Cyprus, he explained that only 58.8 per cent of young people achieve the basic level of financial knowledge. By comparison, 80.1 per cent of people aged between 40 and 49 reach the same benchmark. Poor transport links and difficult access to Troodos are the biggest barriers to the region’s further tourism development, according to Troodos regional tourism board (Etap Troodos) president Nikos Matthaiou. In an interview with Entrepreneurial Limassol, a periodical published by the Limassol Chamber of Commerce and Industry (Evel), Matthaiou said that despite substantial investment in hotel units and the expansion of alternative forms of tourism in recent years, reaching Troodos remains difficult and costly for foreign visitors. “The trip from the airports to Troodos can be more expensive than the airfare itself,” he said. He explained that there are currently no direct bus connections linking the airports of Larnaca and Paphos with the Troodos region. Matthaiou revealed that discussions had already taken place with the transport ministry and the deputy tourism ministry. Logicom Public Ltd reported a sharp drop in profit attributable to shareholders for the first quarter of 2026, falling by 55.2 per cent to €10.7m, compared with €23.9m in the same period last year, according to the company’s interim management report. The decline was mainly attributed to the lower write-off of negative goodwill from the acquisition of investments, as well as reduced turnover, gross profit and other income. This was partly offset by lower administrative expenses, reduced expected credit losses and lower taxation when compared with the first quarter of 2025. Gross sales decreased by 2 per cent to €286.6m, from €292.4m a year earlier. The group said the distribution sector recorded a marginal decline of 0.9 per cent, mainly due to lower sales in Saudi Arabia, the United Arab Emirates, Kuwait and Romania. Cyprus maintained a steady economic profile between 2024 and 2025, with figures from Eurostat confirming that the island remains close to the European Union average for living standards. The island recorded an actual individual consumption figure of 98 per cent of the European Union average for both 2024 and 2025, positioning it firmly among the nations closing in on the continental benchmark. Data for 2024 also placed the gross domestic product per capita for Cyprus at 99 per cent of the European Union average, reflecting the island’s relative standing in overall economic activity. This insight into the material wellbeing of citizens is derived from the latest purchasing power parities data, which provides a standardised look at how residents live across all 27 member states. The European Central Bank (ECB) released its consolidated banking data on Friday, revealing that total assets held by EU-headquartered credit institutions rose by 1.6 per cent to reach €33.50 trillion by the end of December 2025. During this same period, the aggregate non-performing loans ratio for the EU banking system remained stable at 1.97 per cent. The data, which covers 332 banking groups and 2,292 stand-alone credit institutions, also highlighted an aggregate return on equity of 9.3 per cent and a Common Equity Tier 1 ratio of 16.42 per cent. While the European sector displayed signs of stability, recent data from the Central Bank of Cyprus (CBC) paints a more complex picture for the domestic market. Banking sector profitability in Cyprus declined by 23.6 per cent during the first quarter of 2026, falling to €202 million compared with the €264 million recorded in March 2025. This downturn was primarily attributed to a reduction in net interest income and losses stemming from foreign exchange differences. Despite the dip in earnings, total assets within the Cypriot banking sector grew by 0.4 per cent, or €274 million, reaching €70.23 billion by March 31, 2026. Institute of Certified Public Accountants of Cyprus (Selk) president Odysseas Christodoulou will continue to lead the organisation following the completion of the statutory proceedings of the association’s 65th Annual General Meeting, which resulted in the formation of a new board of directors. During the first meeting of the newly formed board, president Odysseas Christodoulou retained his position, while vice-president Andreas Andreou also continued in his role. The association announced that the new board was established after the conclusion of the statutory part of the annual assembly. In the context of the Annual General Meeting, Konstantinos Kallis and Marios Demetriades were re-elected to the board for a new term. The new board of directors comprises president Odysseas Christodoulou, vice-president Andreas Andreou and secretary Eleni Pyrgou. The Cyprus Securities and Exchange Commission (CySEC) has warned investors about a number of websites that are not operated by entities authorised to provide investment services or carry out investment activities under Cyprus law. The regulator identified the following platforms as failing to hold the necessary authorisation to provide investment services in the European Union: solartecna.com, lucrativeedges.com, optramarket.com, and harvestsphereonline.com. The list of flagged entities also includes pehjosf.com, irafloxi.com, evpmarketgroup.com, aintelligence24.com, and primeinvests.eu. Furthermore, the commission cautioned investors against fxmaple.com, fxmarketstrade.com, derivinvestments.com, 24yield.com, and xmarketcoin.com. Europe’s long-term competitiveness will depend less on the amount of money available to startups and more on the strength of the ecosystems supporting them, according to seasoned entrepreneur, policy advisor and angel investor Ana Barjasic. Speaking to the Cyprus Mail on the sidelines of the 2026 European Innovation Council (EIC) Summit in Brussels, Barjasic said that too many discussions about innovation focus on funding while overlooking the deeper foundations required to create sustainable companies and retain talent in Europe. The founder of Connectology and Global Advisor at the Global Entrepreneurship Network said one of the biggest mistakes made by early-stage founders is assuming that attracting investors should be their first objective. Instead, she believes entrepreneurs should begin by validating whether a genuine market exists for what they are building. “The most important thing is to validate whether there is a need for whatever solution or service they are building,” Barjasic said. She explained that many founders ask potential customers whether they like an idea, only to receive encouraging responses that provide little information about actual demand. “The right question is whether you are willing to pay for something, and how much,” she said. According to Barjasic, customer traction opens doors to investors and other opportunities far more effectively than a pitch deck alone. She added that founders often fail to think strategically about fundraising itself. Many entrepreneurs, she said, have absorbed the idea that starting a company should automatically be followed by searching for investors. The Cyprus Stock Exchange (CSE) announced on Friday that it has extended the suspension of trading for shares of four companies listed on its Emerging Companies Market for an additional two months. This decision, effective until August 24, 2026, affects Rianeson Investments Plc, G.A.P. Vassilopoulos Public Ltd, A.J. Green Shell Plc, and K. Kouimtzis S.A. The regulatory action was taken pursuant to Article 185 of the Securities and Cyprus Stock Exchange Law, as the exchange determined that the reasons necessitating the initial suspension remain unresolved. Ellinas Finance Public Company Ltd shareholders approved a dividend of 1.75 cents per share, representing 3.9 per cent of the nominal value of €0.45, during the company’s annual general meeting held on Thursday. Shares will trade with the right to the dividend until July 3, 2026, while the ex-dividend date is set for July 6, 2026. Beneficiaries will include those registered in the company register or holders of securities through over-the-counter sales transfers completed by the archive date of July 7, 2026. Payment will be issued in euros and the cheques are scheduled to be posted by July 28, 2026, the company stated. Petrolina (Holdings) Public Ltd shareholders approved a final dividend of 5.8 per cent, or 2.0 cents per share, during the company’s annual general meeting held on Thursday. The dividend payout is scheduled for July 28, 2026, for all shareholders recorded in the Cyprus Stock Exchange (CSE) register by June 29, 2026. Shares in the company will begin trading ex-dividend on the Cyprus Stock Exchange starting June 26, 2026. Moreover, the meeting saw the unanimous approval of the management report and the audited financial statements for the year ending December 31, 2025. The Cyprus Shipping Chamber’s (CSC) ‘Adopt a Ship’ programme marked its 20th anniversary this year, with teachers, schools and shipping companies recognised for their role in one of Cyprus’ longest-running maritime education initiatives. The closing ceremony for the 2025–2026 programme was hosted by Columbia Shipmanagement, bringing together teachers, industry representatives and organisers to celebrate another year of cooperation between classrooms and the shipping sector. Teachers who took part in the programme were awarded certificates in appreciation of their participation, as the initiative continues to introduce pupils to the maritime world and the role of shipping in Cyprus and internationally. Safe Bulkers reported a sharp rise in first-quarter profit, supported by stronger dry bulk market conditions, higher charter revenues and lower vessel operating costs, while the company also raised its dividend to shareholders. The company, controlled by the family of Poly V. Hajioannou and listed on the New York Stock Exchange, said net income rose to $22.2 million in the first quarter of 2026, compared with $7.2 million in the same period last year, according to its official earnings announcement. Net revenue increased by 16 per cent to $74.4m, from $64.3m a year earlier, mainly due to higher charter revenues and the contribution of vessels fitted with exhaust gas cleaning systems, known as scrubbers. Earnings per share rose to $0.20, from $0.05 in the first quarter of 2025, while EBITDA increased to $42.2m, compared with $28.8m a year earlier. On an adjusted basis, net income stood at $20.7m, while adjusted EBITDA reached $40.7m. The Cyprus Securities and Exchange Commission (CySEC) has announced that, as of December 31, 2025, Epamina Corporate Ltd voluntarily waived its authorisation to provide administrative services, resulting in the lapse of its licence and the company’s removal from the regulator’s register of licensed persons. According to CySEC, the company expressly waived its authorisation under Section 16(1) of the Law Regulating Companies Providing Administrative Services and Related Matters of 2012, as amended. As a result, the company’s authorisation number 121/196, which had been granted by CySEC, lapsed with effect from December 31, 2025. Consequently, Epamina Corporate Ltd ceased providing administrative services from that date. The euro area annual inflation rate climbed to 3.2 per cent in May 2026, marking a rise from the 3.0 per cent recorded in April, according to fresh data released by Eurostat this week. This upward trend was also reflected across the broader European Union, where the annual inflation rate reached 3.3 per cent in May 2026, an increase from 3.2 per cent the previous month. For comparison, these figures remain significantly higher than those from a year earlier, when the inflation rate stood at 1.9 per cent for the euro area and 2.2 per cent for the European Union. In Cyprus, the inflation landscape showed a distinct movement, with the island recording a 3.5 per cent year-on-year inflation rate for May 2026, alongside a 0.7 per cent increase on a month-on-month basis. Cyprus has emerged as a leader in protecting young people from severe material and social deprivation, according to newly released figures from Eurostat for 2025. The island recorded a rate of just two per cent for this demographic, placing it among the top ten best-performing nations within the European Union. This performance stands in contrast to the broader continental picture, where the rate for young people aged 15 to 29 years stood at 5.8 per cent, maintaining the same share recorded in 2024. Across the union, this figure for the youth remains slightly lower than the rate observed for the total population, which sat at 6.3 per cent. While the situation in Cyprus remains stable, other member states face significant challenges in ensuring the wellbeing of their younger citizens. The highest shares of young people facing severe material and social deprivation were reported in Romania at 15.1 per cent, Greece at 14.7 per cent, and Bulgaria at 14.0 per cent.