Cyprus Business Now: tourism, economic outlook, construction, Cyta, BoC, energy

Telecommunications provider Cyta has signed an agreement to acquire the RedMax Data Centre in the Latsia Industrial Area, marking a strategic investment aimed at expanding Cyprus’ digital infrastructure and strengthening the country’s position as a regional data hub. The agreement also includes the expansion and upgrade of the facility, with development set to proceed in phases. The first phase is expected to enter commercial operation in early 2027, while the completed project will become the largest privately owned data centre in Cyprus. The investment represents the next major step in the development of Cyta’s data centre portfolio, significantly increasing the organisation’s ability to provide cloud services and equipment colocation at a larger scale to businesses, public sector bodies and international organisations. Cyprus’ economic growth slowed to its weakest pace in ten quarters during the first quarter of 2026, with Eurobank Research attributing the deceleration primarily to a rebound in imports while forecasting that construction will remain a key pillar of economic activity for the rest of the year. According to the bank’s latest economic analysis, gross domestic product expanded by 3.0 per cent year-on-year in the first quarter of 2026, down from 4.3 per cent in the fourth quarter of 2025 and 3.6 per cent in the first quarter of 2025. Eurobank Research said the slowdown was mainly the result of a less favourable contribution from net exports, despite continued strong trade growth. Exports increased by 10.5 per cent year-on-year, while imports rose by 10.4 per cent, marking a significant shift from the previous quarter when exports grew by 3.4 per cent and imports contracted by 3.9 per cent. The report explained that the sharp rebound in imports largely reflected base effects linked to unusually low investment in transport equipment, including ships and aircraft, a year earlier. Cyprus’ tourism industry remained heavily concentrated in the summer months during 2025, with Eurostat figures showing that August and July were by far the busiest periods for overnight stays in tourist accommodation across the island. According to the European statistical office, August and July were the two busiest months in every European Union member state, reflecting the combined influence of weather conditions, geography and school holiday periods. In Cyprus, tourist accommodation establishments recorded 2,953,148 overnight stays in August, making it the busiest month of the year. This was followed by 2,627,725 overnight stays in July, meaning the two peak summer months together generated 5,580,873 overnight stays. Based on the full-year total of 18,704,653 overnight stays, July and August accounted for approximately 29.8 per cent of all nights spent in tourist accommodation in Cyprus during 2025. Cyprus could face serious electricity supply problems by 2030 if natural gas is not introduced by then, Energy Minister Michael Damianos warned on Tuesday, insisting that completing the long-delayed Vasiliko liquefied natural gas terminal is the country’s only viable option. Speaking before parliament’s House energy committee, Damianos said the Vasiliko project “must be completed before 2030 – and it certainly will be completed before 2030.” He argued that pursuing an alternative interim solution would likely take just as long, if not longer, because of the public procurement process, which would require new tender specifications, bidding procedures, possible legal challenges and construction from scratch. “Our decision is to continue with the Vasiliko project because we need it. We need natural gas,” he said. The government is following the roadmap it drafted in 2025 to establish Cyprus as an all-year-round tourist destination with clear aims and priorities to develop alternative forms of tourism, highlight Cyprus’ nature, culture and people, and rejuvenate remote areas, President Nikos Christodoulides said on Tuesday. Addressing the Cyprus Hoteliers Association (Pasyxe) annual meeting in Nicosia, during which Yiannis Pantazis took over the organisation’s reins from Thanos Michaelides, the president said the contribution of tourism to the economy recorded an increase from 12.8 per cent in 2023 to 14 per cent in 2025. Furthermore, tourist arrivals have increased by 41.6 per cent since 2022, while revenue from tourism increased by 51.5 per cent during the same period. The year 2025 was a record year with 4.5 million arrivals and €3.7 billion revenue generated by tourism, he said. The board of directors of Orca Investments Plc announced on Tuesday that it has successfully completed the payment of a dividend from the retained earnings of the 2023 financial year. This distribution was made to all eligible shareholders who were registered in the company records as of June 30, 2026. The total dividend amount paid out by the company reached €11.889. This figure equates to a dividend distribution of €0.0099075 for each share held by the investors. Finance Minister Makis Keravnos is traveling to Brussels today to participate in meetings of the Eurogroup on July 9 and the ECOFIN Council on July 10, where European Union finance ministers will discuss fiscal policy, digital finance, artificial intelligence and the bloc’s economic competitiveness. According to an announcement by the finance ministry, the Eurogroup meeting on Thursday, July 9, will begin with ministers exchanging views on fiscal developments in the euro area and the appropriate fiscal policy stance for 2027, as member states prepare their national budgets. The discussion will be based on presentations by the European Commission and the European Fiscal Board. Ministers will also exchange views on the international role of the euro, drawing on the European Central Bank’s annual report. Cyprus’ industrial sector generated higher value added and recorded a modest increase in employment during 2024, according to figures released by the Cyprus Statistical Service (Cystat), with manufacturing remaining the main driver of growth. The statistical service reported that employment across the broad industrial sector increased by 0.5 per cent to 42,800 people in 2024, up from 42,600 in the previous year. Within the sector, manufacturing employed 38,000 people, while mining and quarrying accounted for 600 employees, electricity supply employed 2,400 people, and water supply, sewerage and waste management employed 1,900 people. The total value of industrial production at current prices reached €6.95 billion in 2024, representing a marginal 0.1 per cent increase from €6.94 billion recorded in 2023. Cyprus recorded a sharp increase in building activity during the first quarter of 2026, with the state statistical service (Cystat) reporting that the number of building permits issued rose by a whopping 44.1 per cent compared with the same period last year. According to Cystat, 776 building permits were authorised during March 2026, with a combined value of €433.1 million and a total floor area of 353,900 square metres. The permits provide for the construction of 1,940 dwelling units, underlining continued strength in the residential development pipeline. For the January to March 2026 period, a total of 2,276 building permits were issued, compared with 1,580 during the corresponding period of 2025. This represents an increase of 44.1 per cent in the number of permits issued year-on-year. The total value of the permits also increased significantly, rising by 41.6 per cent, while the total authorised floor area expanded by 40.2 per cent. The Bank of Cyprus (BoC) on Tuesday announced that it has revised its privacy statement as part of a broader strategy to ensure the comprehensive protection of personal data. This update was implemented to align with the requirements of Regulation (EU) 2016/679, known as the General Data Protection Regulation, and the corresponding national law governing the protection of natural persons during data processing. The revised statement applies specifically to customers and potential customers of the bank. It also extends to the representatives of these individuals, as well as the beneficiaries of legal entity customers and potential customers. Cyprus recorded the highest monthly increase in the volume of retail trade among European Union member states during May 2026, according to the latest figures published by Eurostat, the statistical office of the European Union. Cyprus saw its retail trade volume grow by 3.7 per cent between April 2026 and May 2026, marking a significant performance compared to the broader economic trends across the bloc. Across the wider euro area, the seasonally adjusted retail trade volume rose by 0.2 per cent, while the EU as a whole saw a modest increase of 0.5 per cent. This growth follows a notable decline recorded in April 2026, when retail trade volume fell by 0.3 per cent in the euro area and by 0.6 per cent in the EU. Cyprus’ Composite Leading Economic Index (CCLEI) remained in negative territory in June 2026, posting a year-on-year decline of 0.65 per cent, according to the latest estimates published by the Economics Research Centre of the University of Cyprus (CypERC). The centre said the latest reading marks another year-on-year decline following similar decreases in previous months, suggesting that external pressures continue to weigh on the short-term outlook for the Cypriot economy. Although the index remained negative, the research centre said the June reading reflected a moderation in the pace of the decline, even as international economic and geopolitical pressures continued to affect economic activity. According to the report, the negative year-on-year performance primarily reflects persisting external pressures and subdued economic activity in an environment characterised by heightened geopolitical uncertainty. Cyprus recorded the highest monthly increase in industrial producer prices across the European Union during May 2026, according to the latest data released by Eurostat. Specifically, Cyprus saw a surge of 3.6 per cent in these costs compared with April 2026, outpacing all other member states. Industrial producer prices across the wider euro area and the EU both rose by 0.2 per cent throughout the same period. This latest monthly increase follows a growth of 0.7 per cent in the euro area and 0.8 per cent in the EU during April 2026. When comparing annual figures from May 2026 to May 2025, industrial producer prices climbed by 5.9 per cent in the euro area and by 5.7 per cent in the EU.