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Divergent Trends Define Cyprus Service And Transport Sectors In Q2 2025

by THEFUTURE.TEAM

September 12, 2025

Overview Of Mixed Sector Performance

The Cyprus turnover value index for services and transport in the second quarter of 2025 revealed a blend of robust growth and modest declines compared to the same period in 2024. According to data from the state statistical service (Cystat), key sectors exhibited varied performance profiles, reflecting both resilience and emerging challenges across the economy.

Substantial Gains In Accommodation And Food Services

Accommodation and food service activities led the upswing with an 11.7% increase, underpinned by a strong upswing in accommodation services at 13.9% and a 9.3% boost in food and beverage operations. This trend underscores the sector’s capacity to attract both local and international clientele, bolstering Cyprus’s tourism appeal.

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Steady Momentum In Administrative And Support Services

Administrative and support service activities improved by 7.2% overall. Notably, the rental and leasing segment rose by 7.8%, while travel agency and tour operator services increased by 4.9%. Complementing these figures, security and investigation operations surged by 11.4%, and office administrative support grew by 9.6%, indicative of growing business operational needs and corporate confidence.

Emerging Trends In Digital And Information Services

The information and communication sector advanced by 4.4%, with publishing and programming and broadcasting growing by 5.2% and 3% respectively. Telecommunications and related IT services also reflected moderate gains, with computer programming and allied activities seeing a 3.4% increase, while information service activities surged by 17.3%, signaling robust digital transformation across the economy.

Professional And Technical Service Sectors

Professional, scientific and technical activities recorded a 3.6% rise. Within this domain, legal and accounting, management consulting, and advertising services experienced modest yet significant growth, while sectors such as architectural and engineering, and motion picture and sound recording saw slight declines of 3.1% and 3.3% respectively.

Transport And Storage: Mixed Performance

The transport and storage sector delivered a 2.1% gain overall. Land transport rose by 5.7%, with water transport increasing by 4% and air transport modestly rising by 0.7%. Support functions including warehousing and postal courier services also reflected positive momentum, though real estate activities experienced a contraction of 1.8% in turnover compared to the previous year.

H1 2025 Sectoral Outlook

Analyzing the first half of 2025, trends maintained a similar pattern with accommodation and food service activities up by 10.9%, administrative and support services by 8.2%, and information and communication at 6.3%. Professional services improved by 4.1% while transport activities continued their steady progression at 2.1%, even as real estate faced a cumulative decline of 3.4%. These figures highlight both the sectoral dynamism and the nuanced challenges that policymakers and business leaders must navigate in a rapidly evolving economic landscape.

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Trump Threatens 100% Tariffs On Countries That Tax U.S. Tech Companies

President Donald Trump on Friday warned that countries imposing digital services taxes on U.S. companies could face tariffs of up to 100% on their exports to the United States.

A Direct Warning To Trade Partners

In a post on Truth Social, Trump said the tariff would “supersede Trade Deals made with the Country, whether implemented, signed, or not.”

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He also said the measures would be “immediately imposed” if governments proceed with plans to introduce digital services taxes.

Why Digital Taxes Have Become A Flashpoint

Digital services taxes are intended to tax revenue generated by large online platforms, many of which are U.S.-based companies such as Meta, Alphabet and Amazon.

Supporters argue the measures ensure multinational technology companies pay taxes where they generate revenue. Washington, however, has long argued that such taxes disproportionately target American firms.

Trump has repeatedly threatened retaliation against countries adopting digital services taxes. Last year, he warned Canada that it would end trade negotiations if Ottawa introduced its proposed digital levy. Canada later withdrew the measure before it took effect.

Europe Is In The Crosshairs

More than a dozen countries have already introduced digital services taxes, according to the Tax Foundation. In Friday’s post, Trump singled out “Numerous European Countries” that he said are considering similar measures.

That puts the issue squarely at the intersection of tax policy, trade policy and geopolitical leverage. For global businesses, the risk is not just higher costs, but the possibility that tariff retaliation could spill into broader commercial relationships.

Legal Authority Remains Unclear

Questions remain over the legal authority the administration could use to impose immediate country-specific tariffs on this scale. Earlier, the U.S. Supreme Court ruled that the International Emergency Economic Powers Act did not authorize the administration’s reciprocal tariffs.

Hours after that decision, Trump announced an executive order imposing a new global 10% tariff under Section 122 of the Trade Act of 1974. That provision allows tariffs to remain in place for up to 150 days unless Congress approves an extension.