The Cypriot economy grew by 3.3% year-on-year in the second quarter of 2026, while real GDP increased by 0.8% quarter-on-quarter, accelerating from the 0.5% growth recorded in the first quarter, according to Quarterly National Accounts data released on Tuesday by the Statistical Service of Cyprus.
Real GDP stood at €7,872.1 million in the second quarter, compared with €7,798.1 million in the first quarter.
The growth in the second quarter was driven mainly by wholesale and retail trade, transport and accommodation and food services, information and communication technologies (ICT), financial and insurance activities, and construction.
Domestic demand remained a key driver of growth. Final consumption expenditure rose by 5.2% year-on-year, with household and non-profit institutions serving households’ consumption increasing by 5.4%, while general government consumption rose by 4.5%.
Investment recorded an even stronger increase. Gross fixed capital formation rose by 9.4% year-on-year and by 17.7% compared with the first quarter of 2026. However, excluding ships and aircraft, fixed investment declined by 2.0% year-on-year.
In external trade, exports of goods and services increased by 9.6%, while imports rose at a faster pace, by 12.9%.
Among individual economic activities, construction recorded the strongest annual growth at 5.4%, followed by wholesale and retail trade, transport and accommodation and food services at 4.7%, information and communication at 4.5%, and financial and insurance activities at 3.9%.
Manufacturing grew by 0.8%, while public administration and defence, education, and human health and social work activities increased by 1.1%.
The 3.3% annual growth rate compares favourably with the euro area, where GDP grew by 1% year-on-year in the second quarter of 2026.
