Cyprus Business Now: Schengen, banks, Jumbo, property, inflation

Cyprus borrowing rates were broadly in line with the euro area median in July, while deposit rates remained the lowest in the euro area, according to the Central Bank of Cyprus (CBC). The central bank said the divergence in deposit rates could be linked to the high liquidity of Cyprus banks, as well as the relatively small size of the domestic banking market. The interest rate on new housing loans fell to 3.78 per cent in July, from 4.04 per cent in June, while the rate on household deposits with an agreed maturity of up to one year declined to 1.27 per cent from 1.42 per cent. By contrast, the rate on deposits from non-financial corporations rose to 1.56 per cent from 1.41 per cent. The rate on consumer loans increased to 6.94 per cent, from 6.50 per cent a month earlier. For non-financial companies, the rate on loans of up to €1 million rose to 4.47 per cent from 4.32 per cent, while the rate on loans above €1 million increased to 4.29 per cent from 4.07 per cent. Fast Track sounds reassuringly simple until a passenger pays for it and discovers that the queue it skips is not the queue holding them up. At Larnaca Airport, the useful question is not whether there is an express lane. There is. The question is which part of the journey it covers. A traveller may still have to check in a bag, clear security, pass border control and wait at the gate. Paying to move more quickly through one of those stages does nothing to the other three. The confusion is particularly easy in Cyprus because the island is in the European Union but not yet part of the border-free Schengen area. A flight from Larnaca to Athens, Paris or Frankfurt is therefore not treated like an internal Schengen journey. Passengers still cross an external Schengen border, even when they hold a Cypriot or another EU passport. Cyprus’ new-home market split sharply along district lines in the first half of 2026, with Nicosia recording the most sales, Limassol attracting the largest share of spending and Paphos posting the highest house prices. According to Landbank Analytics, 3,594 off-plan apartments and houses were sold for a combined €1.149 billion during the six-month period. The islandwide totals were first released in July, but the latest breakdown shows how sharply prices, property types and demand differed from one area to another. Nicosia and Limassol, for example, each recorded just over 1,000 sales. However, the 1,063 transactions in Nicosia were worth €232.9 million, little more than half the €435m generated by Limassol’s 1,050 sales. The same divide was apparent across the wider market. Nicosia and Larnaca accounted for 54.1 per cent of transactions but only 36.6 per cent of their value. By contrast, Limassol and Paphos attracted 60.3 per cent of the money invested with 43 per cent of sales. Bank of Cyprus Holdings and the Bank of Cyprus on Thursday announced the appointment of Elisabet Pinilla Guell as an independent non-executive director, following approval from the European Central Bank (ECB). The appointment also took effect for the board of directors of Bank of Cyprus Holdings, the announcement added. Pinilla is a senior international executive with more than 30 years of experience in technology leadership across the banking and insurance sectors. She currently serves as head of technology and operations at Santander UK and Cater Allen, where she performs the SMF24 chief operations function for both entities. Pinilla is also a member of the Santander UK executive committee, the executive risk, compliance and economic crime committee and the global technology and operations committee. Eurobank has confirmed that 6,555,561 new ordinary shares, created through the exercise of stock options by management and staff, will begin trading on Euronext Athens on Friday, September 4. The announcement follows the bank’s earlier disclosure that 231 beneficiaries had exercised options under the second, third, fourth and fifth series of its eighth stock option plan. The beneficiaries comprise members of Eurobank’s management and personnel, as well as employees of affiliated companies meeting the relevant legal criteria. The bank said Euronext Athens approved the admission of the new shares to trading on September 2, paving the way for trading to begin on Friday. Cyprus tourism continued to show resilience and momentum in the first half of 2026, despite disruption caused by developments in the Middle East and turbulence in air transport during March and April, government spokesman Konstantinos Letymbiotis said on Thursday. Speaking to media representatives at the Presidential Palace, Letymbiotis compared this year’s performance with 2024, which had been the best year in the history of Cypriot tourism at the time, before 2025 set a new record. Despite the exceptional circumstances affecting two critical months of 2026, tourist arrivals during the first half of the year remained slightly higher than in the corresponding period of 2024, while tourism revenue increased by 7.5 per cent. “From May onwards, the picture has been steadily improving and the gap from the 2025 record has been narrowing significantly,” Letymbiotis said. Cyprus shoppers continued to give Jumbo a lift in August, with sales at its stores on the island rising by approximately 9 per cent year on year, following a 14 per cent increase in July. For the first eight months of 2026, Jumbo’s sales in Cyprus grew by around 6 per cent, remaining slightly ahead of the group-wide growth rate. Across the Jumbo group, sales increased by approximately 9 per cent in August, continuing the improvement recorded during the previous month. As a result, group sales for the January-to-August period rose by around 5.8 per cent year on year, placing the retailer slightly ahead of management’s full-year target of approximately 5 per cent. Meanwhile, the company announced that an extraordinary cash distribution of €1 per share will be proposed at an upcoming meeting of its board of directors. The European Central Bank (ECB) reported this week that euro area borrowing costs were broadly stable in July, while recent Cyprus data showed deposit rates remained substantially below the euro area average and lending rates stayed comparatively high. The ECB said the composite cost of borrowing for new loans to corporations across the euro area was broadly unchanged at 3.80 per cent in July, while the corresponding indicator for new household loans for house purchases also remained broadly stable at 3.54 per cent. The figures provide a backdrop for Cyprus, where banks continued to offer lower returns on savings than their euro area counterparts while charging higher rates on several categories of business and household borrowing. In Cyprus, the interest rate on household deposits with an agreed maturity of up to one year rose to 1.42 per cent in June, from 1.25 per cent in May, according to Central Bank of Cyprus (CBC) data. Cyprus inflation accelerated to 3.5 per cent in August, as rising fuel prices and air fares drove a sharp increase in transport costs, according to figures released on Thursday by the statistical service (Cystat). The Consumer Price Index (CPI) rose by 0.93 points during the month, reaching 103.25 units compared with 102.32 in July. This represented a monthly increase of 0.91 per cent, reversing the decline recorded a month earlier. Annual inflation also climbed from 2.9 per cent in July, when lower fuel and clothing prices had pulled the index down on a monthly basis. For the first eight months of 2026, consumer prices were 2.08 per cent higher than during the corresponding period of 2025. The August increase was led by transport, where prices rose by 11.36 per cent year on year and 5.13 per cent compared with July. Cyprus’ registered unemployed rose by 7.2 per cent in August, with the increase driven mainly by public administration, education, administrative and support services, and information and communication, according to figures released on Thursday by the statistical service (Cystat). The number of unemployed persons registered at district labour offices reached 12,385 on the last day of August 2026, compared with 11,556 in the same month last year. This represented an annual increase of 829 persons, Cystat reported. Compared with July, the actual number of registered unemployed rose by 657, from 11,728 to 12,385. Public administration and education together accounted for 470 of the additional registrations during the month. However, the seasonally adjusted figure, which provides a clearer picture of the underlying labour market trend, also increased to 10,671 in August, from a revised 10,563 in July. This was the highest seasonally adjusted total since August 2024, when it stood at 10,752. The Central Bank of Cyprus (CBC) on Thursday published a piece of analysis by economist Marios Louca arguing that deeper European integration was becoming increasingly important as geopolitical tensions reshaped global trade, investment and economic policy. The article, titled “More Europe in a Fragmented World: Geoeconomic Fragmentation, China’s Rise and Europe’s Strategic Response”, examined the changing global economic landscape and the implications for Europe’s competitiveness and resilience. “The global economy is entering a new phase in which geopolitical considerations increasingly shape economic relationships,” he said. It argued that while this shift presented challenges for Europe’s openness-based growth model, it also increased the importance of scale, resilience and collective action. Cyprus brought its home-grown maritime technology to an international audience in Hamburg on Wednesday, with local companies presenting tools designed to make ships safer, cleaner and more efficient. The Cyprus Maritime Innovation Event was jointly organised by the Ministry of Energy and the Shipping Deputy Ministry as part of SMM Hamburg, which runs from September 1 to 4. Around 2,300 exhibitors from as many as 70 countries are taking part in this year’s exhibition, while about 50,000 participants from 120 nations are expected to attend. Opening the Cyprus event, trade and industry officer Andri Katomoniatou Iakovou and Cyprus’ deputy chief of mission in Germany George Stavrinou spoke about the longstanding commercial and maritime relationship between the two countries. The Cyprus Chamber of Commerce and Industry (Keve) on Thursday called for stronger support for families, particularly larger families, after meeting with the Pancyprian Organisation of Large Families to discuss Cyprus’ worsening demographic outlook and its economic consequences. The meeting involved an extensive exchange of views on the demographic problem facing Cyprus, with the two sides examining the social and economic implications of falling births, an ageing population and a deteriorating balance between births and deaths. “The demographic issue is one of the biggest challenges that our country will have to address over the coming decades,” Keve said. Turnover across Cyprus’ services and transport sectors moved in different directions during the second quarter of 2026, with professional services posting the strongest growth while accommodation and administrative support activities declined. According to the statistical service (Cystat), professional, scientific and technical activities recorded a 3.4 per cent increase compared with the same quarter of 2025. Transport and storage activities and information and communication both rose by 2.1 per cent, while real estate activities increased by 1.6 per cent. By contrast, accommodation and food service activities declined by 3.1 per cent, while administrative and support service activities fell by 2.2 per cent. During the first six months of 2026, professional, scientific and technical activities recorded the strongest overall increase, rising by 3.5 per cent compared with the corresponding period of 2025. The board of directors of A. Tsokkos Hotels Public Ltd announced on Thursday that it will meet later this month to examine and approve key financial performance metrics for both 2024 and 2025. According to the announcement, the company’s directors will gather on September 22, 2026 at 4.30pm at the Constantinos the Great hotel in Protaras. The primary focus of the meeting will be the examination and approval of the final annual financial results for the company and its group for the financial year that ended on December 31, 2024. Board members will also consider and vote on the approval of the summary intermediate financial results covering the six-month period from January 1, 2025 to June 30, 2025. Agricultural input and investment prices in Cyprus fell by 2.62 per cent year-on-year in the first quarter of 2026, while producer prices for agricultural products increased by 5.4 per cent, according to data published by the state statistical service (Cystat). The price index for intermediate consumption and investment in agriculture reached 121.37 in the first quarter, with 2020 used as the base year. The largest annual decline was recorded in the price of seeds and planting stock, which fell by 19.4 per cent. Electricity prices also dropped by 10.95 per cent over the same period. However, farmers faced higher costs in other areas, with prices for transport equipment and tractors rising by 16.5 per cent. Prices for agricultural materials increased by a further 8.23 per cent. Cypriot consumers placed 62 per cent more orders through Skroutz during this year’s summer sales compared with the corresponding period last year, with turnover rising by 58 per cent, according to data released by the Greek marketplace. The average value of an order stood at €101, remaining broadly unchanged from last year, while the average total amount spent by each consumer during the sales period increased by 4 per cent to €151. The strongest shopping activity was recorded towards the end of the sales period, with Friday, August 28 and Monday, August 31 registering the highest levels of purchasing activity. Limassol accounted for the largest share of orders at 35 per cent, followed by Nicosia with 34 per cent, Larnaca with 17 per cent, Paphos with 9.5 per cent and Famagusta with 4 per cent. Skroutz, Greece’s most popular marketplace, recorded the figures for the summer sales period running from July 13 to August 31, covering purchases of discounted products.