Cyprus current account deficit nearly doubles to €1.31 billion

Cyprus’ current account deficit nearly doubled in the second quarter of 2026, while the country’s net external debt position improved, according to provisional data released by the Central Bank of Cyprus (CBC) on Monday. The current account deficit widened to €1.31 billion in Q2 2026, up from €697.20 million in the same quarter of 2025, according to the CBC’s latest external statistics. The figures, released on Monday, cover Cyprus’ balance of payments, international investment position and external debt for the second quarter. The deterioration in the current account means that Cyprus recorded a substantially larger gap between its transactions with the rest of the world than it had a year earlier. When the impact of special purpose entities (SPEs) is excluded by treating them as non-residents, the current account deficit stood at €1.03 billion in Q2 2026. That compared with an adjusted deficit of €607.30 million in Q2 2025. The figures also showed a deterioration in Cyprus’ international investment position during the quarter. The international investment position, which measures the difference between the financial assets held abroad by residents and the liabilities owed to foreign investors, recorded a net liability position of €30.88 billion at the end of Q2. That was up from a net liability position of €30.52 billion at the end of the first quarter. When adjusted for the impact of SPEs, the net liability position was considerably smaller at €12.38 billion in Q2, compared with €12.32 billion in Q1. The CBC data also showed that Cyprus’ gross external debt increased during the quarter. Gross external debt rose to €228.60 billion in Q2, from €227.52 billion in Q1. At the same time, Cyprus’ external assets in debt instruments increased to €220.07 billion from €218.54 billion. As a result, the country’s net external debt fell by €457.10 million to €8.53 billion during the second quarter. The net figure reflects the difference between Cyprus’ external debt and its holdings of debt-related assets abroad. The picture changes significantly when the effect of SPEs is removed from the calculations. Adjusted gross external debt stood at €64.55 billion in Q2, compared with €64.41 billion in Q1. The corresponding adjusted net external debt indicator stood at minus €28.67 billion in Q2, compared with minus €28.10 billion in the first quarter. The negative figure indicates that, after the adjustment for SPEs, Cyprus’ external debt-related assets exceeded its corresponding external liabilities. The CBC described all of the figures as provisional, meaning they may be revised as additional information becomes available.