Nicosia, Cyprus. Cyprus’ real gross domestic product growth is projected to slow to 2.7 per cent in 2026 from an estimated 3.8 per cent in 2025, according to updated forecasts by the University of Cyprus Economics Research Centre. Inflation is expected to accelerate to 3 per cent.
Cyprus forecasts
The Economics Research Centre of the University of Cyprus, known as CypERC, forecast real GDP growth of 2.7 per cent for 2026, before an increase to 3.1 per cent in 2027.
Compared with its projections published in April, the centre reduced its 2026 forecast by 0.2 percentage points and left its 2027 forecast unchanged.
CypERC said the revision reflected weaker GDP growth in the first quarter of 2026 in Cyprus and the euro area, as well as developments indicated by leading economic indicators between April and June.
According to the report, these developments were primarily linked to the continuing conflict in the Middle East, which has affected regional and international economic conditions.
European GDP data
Eurostat’s preliminary figures showed that seasonally adjusted GDP rose by 0.4 per cent in the euro area and 0.5 per cent in the European Union in the second quarter of 2026 compared with the previous quarter.
The results marked an improvement from the first quarter, when GDP was unchanged in the euro area and rose by 0.1 per cent in the EU.
Compared with the second quarter of 2025, GDP increased by 1.0 per cent in the euro area and 1.2 per cent in the EU. Annual growth in the previous quarter was 0.5 per cent in the euro area and 0.8 per cent in the EU.
Eurostat said the flash estimates were based on incomplete data sources and were subject to further revisions.
