Nicosia, Cyprus. Developments in the Middle East, particularly in the Persian Gulf, are adding uncertainty to the global economy and discouraging new investment initiatives, economist Tassos Yiasemides said. Cyprus tourism industry representatives also reported a decline in arrivals linked to the war in the region.
Economist cites volatility and investment hesitancy
Speaking to the Cyprus Agency News (CNA), Yiasemides said that despite the ceasefire, uncertainty over how talks between the United States and Iran will develop is discouraging investors from taking new initiatives.
“It is the worst thing for an economy to have volatility,” he said, adding that investment decisions and new business initiatives require a stable economic and political environment.
He said this uncertainty is creating wider challenges for the global economy, while repeated ups and downs, especially in an energy-sensitive region, are affecting the decisions of both governments and businesses and slowing economic activity internationally.
Tourism agents report drop in arrivals and flight adjustments
Association of Cyprus Travel & Tourism Agents (ACTTA) vice president Christos Christou said on Wednesday that tourist arrivals to Cyprus fell by 30 per cent in March due to the war in the Middle East, and warned of further declines in the coming weeks.
Speaking during a press conference in Nicosia in the context of the Travel Expo Cyprus 2026 exhibition, Christou said some airlines have reduced summer flights as a result of ongoing developments in the Middle East.
On outbound travel, he said interest among Cypriots for summer bookings is currently increasing.
“There was a freeze initially, but in recent days, and particularly now with the exhibition, we expect interest to grow further and anticipate that all the seats we have secured will be filled,” he said.
He said bookings declined at the onset of hostilities between the United States, Israel, and Iran, particularly after the fall of an Iranian drone in the British Bases in Akrotiri.
IMF maintains Cyprus growth projections amid rising global risks
The International Monetary Fund (IMF) reported that Cyprus will record real GDP growth of 3.8 per cent in 2025 and 3 per cent in 2026, even as global economic risks intensify due to the war in the Middle East.
How do you expect continued volatility in the Middle East to affect travel and business decisions in the coming months?