Cyprus current account deficit rises to €1.3bn, hitting five-quarter high

Cyprus’ current account deficit widened to €1.30 billion in the second quarter of 2026, according to Eurostat, contrasting with a substantial surplus recorded by the European Union as a whole. The deficit was the largest recorded by Cyprus across the five quarters covered by the latest data, having stood at €0.70bn in the second quarter of 2025, €0.20bn in the third quarter, €1.20bn in the fourth quarter and €1.10bn in the first quarter of 2026. The latest figures showed that Cyprus’ current account remained in deficit throughout the entire five-quarter period. The current account records transactions between an economy and the rest of the world involving goods, services, primary income and secondary income. Across the European Union, the seasonally adjusted current account recorded a surplus of €80.20bn in the second quarter of 2026, equivalent to 1.6 per cent of gross domestic product. This was down from a surplus of €98.00bn, or 2.0 per cent of GDP, in the first quarter of the year. It was also below the €91.70bn surplus recorded in the second quarter of 2025, when the surplus was equivalent to 2.0 per cent of GDP. The fall in the EU-wide surplus compared with the first quarter reflected weaker balances across several components of the current account. The surplus on the goods account narrowed slightly to €62.90bn from €63.60bn, while the services surplus fell more substantially, to €41.70bn from €48.10bn. What is more, the primary income surplus dropped to just €0.80bn from €15.70bn in the first quarter. At the same time, the secondary income deficit narrowed to €25.20bn from €29.30bn, Eurostat reported. The EU’s capital account position moved in the opposite direction, with its deficit widening sharply to €16.20bn in the second quarter from €1.70bn in the first quarter. The EU also recorded different current account positions with its main international trading partners during the second quarter. Based on non-seasonally adjusted data, the EU recorded its largest current account surplus with the United Kingdom, at €89.80bn. It also recorded surpluses with Switzerland of €23.90bn, Canada of €12.90bn, Brazil of €10.30bn and Hong Kong of €9.60bn. Surpluses were also recorded with offshore financial centres at €9.20bn, Russia at €1.90bn, Japan at €0.80bn and India at €0.40bn. The EU recorded its largest current account deficit with China, at €66.60bn, followed by a €30.30bn deficit with the United States. The financial account showed substantial cross-border investment flows during the quarter. EU direct investment assets increased by €120.50bn, while direct investment liabilities rose by €1.40bn. As a result, the EU was a net direct investor in the rest of the world, with net outflows of €119.10bn. Portfolio investment recorded a net inflow of €200.70bn, while other investment recorded a net outflow of €104.80bn. Looking at the current account balances of individual EU member states, including transactions within the EU as well as those with countries outside the bloc, 11 member states recorded surpluses and 16 recorded deficits in the second quarter. Germany recorded the largest surplus at €45.00bn, followed by Ireland at €19.70bn and the Netherlands at €16.90bn. Denmark recorded a surplus of €13.20bn, Sweden €11.60bn and Spain €8.70bn, the latest figures showed. Among countries recording deficits, Romania had the largest shortfall at €7.80bn. France followed with a deficit of €6.50bn, Poland recorded €6.20bn and Greece €3.80bn. Cyprus’ €1.30bn deficit was therefore smaller than the largest shortfalls recorded elsewhere in the EU, but represented a further deterioration from the previous quarter. Eurostat’s figures cover the total current account balance, including both intra-EU and extra-EU flows, for individual member states. The data also highlight the contrast between Cyprus’ continued current account deficit and the EU’s sizeable overall external surplus during the same period.