Cyprus current account deficit widens as EU surplus grows in first quarter

Cyprus recorded a wider current account deficit in the first quarter of 2026, even as the European Union posted a stronger external balance, according to figures released by Eurostat on Friday. Eurostat said Cyprus registered a current account deficit of €1.3 billion in the first quarter of 2026, compared with a deficit of €0.8 billion in the fourth quarter of 2025 and €1.0 billion in the corresponding quarter of 2025. The latest figures also showed that Cyprus’ current account had narrowed to a deficit of €0.1 billion in the third quarter of 2025 after standing at €0.4 billion in the second quarter of the same year, before widening again over the following two quarters. Across the EU, the seasonally adjusted current account surplus increased to €113.4 billion in the first quarter of 2026, equivalent to 2.4 per cent of gross domestic product, up from a surplus of €99.2 billion, or 2.1 per cent of GDP, in the fourth quarter of 2025. The EU surplus was also higher than the €104.9 billion, or 2.3 per cent of GDP, recorded in the first quarter of 2025. The improvement in the EU’s external position was driven by stronger services and primary income balances, although the surplus on trade in goods declined during the quarter. The surplus on the goods account fell to €66.7 billion from €89.0 billion in the previous quarter. By contrast, the services account surplus increased to €52.1 billion from €43.9 billion. The primary income account shifted from a deficit of €4.3 billion in the fourth quarter of 2025 to a surplus of €25.3 billion in the first quarter of 2026. At the same time, the secondary income account deficit widened to €30.7 billion from €29.4 billion. The EU’s capital account deficit also increased, reaching €3.8 billion compared with €3.2 billion in the previous quarter. Looking at trade with international partners, the EU recorded its largest current account surpluses with the United Kingdom at €72.8 billion and Switzerland at €38.7 billion during the first quarter of 2026. Additional surpluses were recorded with Brazil at €11.1 billion, Canada at €10.1 billion, Hong Kong at €6.9 billion, Russia at €3.5 billion and Japan at €3.2 billion. The largest current account deficit was with China at €66.3 billion. The EU also posted deficits with the United States at €15.8 billion, offshore financial centres at €1.5 billion and India at €1.1 billion. The financial account data showed the EU remained a net recipient of direct investment from the rest of the world during the first quarter of 2026. Direct investment assets increased by €27.1 billion, while direct investment liabilities rose by €30.4 billion. As a result, the EU recorded net direct investment inflows of €3.3 billion, Eurostat reported. At the same time, portfolio investment registered net inflows of €128.8 billion over the quarter. Meanwhile, other investment recorded net outflows of €123.1 billion. Among EU member states, sixteen countries recorded current account surpluses and ten recorded deficits in the first quarter of 2026, based on available non-seasonally adjusted data, while figures for France were unavailable. Germany recorded the largest surplus at €61.8 billion, followed by the Netherlands at €26.3 billion, Ireland at €17.4 billion, Denmark at €9.2 billion, Spain at €8.9 billion, Sweden at €8.8 billion and Austria at €7.3 billion. Among countries recording deficits, Greece posted the largest at €6.6 billion, followed by Romania at €5.3 billion, Croatia at €3.4 billion, Bulgaria at €2.4 billion and Cyprus at €1.3 billion.