**Title: Cyprus Economy Grows by 3.3 Percent in Q2 2026, Driven by Construction and Technology Sectors**
Cyprus' economy demonstrated robust growth in the second quarter of 2026, expanding by 3.3 percent in real terms compared to the same period last year, as reported by the Cyprus Statistical Service (Cystat). The seasonally and working-day adjusted gross domestic product (GDP) reached €7.87 billion from April to June, marking a quarter-over-quarter increase of 0.8 percent.
The economic expansion was primarily fueled by significant activity in several key sectors, notably wholesale and retail trade, vehicle repairs, information and communication, financial services, and construction. Among these, the construction sector exhibited the most remarkable growth, surging by 5.4 percent to €379.10 million. This growth reflects a sustained demand for construction services and development projects across the island.
In addition to construction, the information and communication sector also showed strong performance, growing by 4.5 percent year on year to reach €931.00 million. Financial and insurance activities contributed positively as well, with an increase of 3.9 percent to €634.10 million, indicating a healthy financial environment.
The broad trade, transport, accommodation, and food services sector continued to be the largest contributor to the GDP, rising by 1.4 percent to €1.61 billion. This sector's growth underscores the ongoing recovery in tourism and related services, which are vital to Cyprus' economy.
Other sectors also recorded positive growth, including mining, manufacturing, and utilities, which expanded by 2.8 percent to €462.30 million. However, manufacturing specifically saw a more modest increase of 0.8 percent, totaling €331.70 million. Real estate activities grew by 2.1 percent to €690.00 million, while professional and technical services rose by 2.6 percent to €684.40 million. The public administration, education, and health sectors experienced a growth of 1.1 percent, amounting to €1.21 billion, and the arts, entertainment, and recreation sector increased by 1.6 percent to €249.20 million.
Conversely, the agriculture, forestry, and fishing sector recorded the weakest growth among all sectors, expanding by only 0.5 percent to €83.90 million. This slow growth may reflect ongoing challenges faced by the agricultural sector in adapting to market demands and environmental conditions.
On the expenditure side, final consumption expenditure rose significantly by 5.2 percent to €6.08 billion. Household consumption was a major driver of this increase, climbing by 5.4 percent to €4.75 billion. Government spending also contributed to the growth, with an increase of 4.5 percent to €1.34 billion.
Investment activity showed a notable increase, with gross fixed capital formation jumping by 17.7 percent to €1.75 billion. However, when excluding ships and aircraft, capital investment experienced a decline of 2.0 percent to €1.48 billion, indicating a mixed picture in terms of domestic investment trends.
Trade dynamics reflected some challenges, as exports of goods and services decreased by 1.8 percent to €8.73 billion, while imports rose by 3.0 percent to €8.48 billion. This shift suggests a growing reliance on imported goods and services, which may impact the trade balance moving forward.
Overall, the second quarter of 2026 showcased a resilient Cypriot economy, with substantial contributions from the construction and technology sectors playing a pivotal role in driving growth. As the country continues to navigate the post-pandemic recovery landscape, these sectors may remain crucial in sustaining economic momentum and fostering further development.