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Cyprus Service Sector Turnover Rises In 2025, Led By Tourism Growth

Cyprus Service Sector Expands In 2025

Cyprus’s service sector recorded strong turnover growth in 2025, driven largely by tourism-related industries and expanding professional services, according to data released by the national statistical service. The figures highlight the continued importance of services as the backbone of the Cypriot economy.

Tourism And Hospitality Lead Growth

Accommodation and food services recorded the strongest increase, with turnover rising by 9.5% compared with 2024. The result reflects sustained tourism demand and continued growth across hospitality businesses. Administrative and support services followed with an increase of 7.4%, reflecting rising activity in business support sectors.

Broad Gains Across Service Industries

Several additional sectors also reported steady growth during the year. Professional, scientific and technical activities expanded by 4.6%, while the communications sector recorded growth of 4.3%. Transport and storage increased by 2.8%, supported by higher logistics and tourism-related demand. Real estate management registered a smaller rise of 0.4%.

Fourth Quarter Maintains Momentum

The fourth quarter of 2025 reaffirmed the overall positive annual trend. Detailed quarterly analysis revealed a continued strong performance in key segments:

  • Accommodation and food services increased by 9.5%
  • Real estate management grew by 5.7%
  • Administrative and support activities advanced by 4.1%
  • Professional, scientific, and technical activities rose by 3.4%
  • Communications improved by 2.1%
  • Transport and storage saw a 1.4% increase

Service Economy Remains Key Growth Driver

Recent data underscores the resilience of Cyprus’s service-driven economic model. Strong tourism performance continues to support related industries such as transport, logistics and professional services, reinforcing the sector’s role as a central pillar of the country’s economic growth.

Attacks On Data Centers In UAE And Bahrain Highlight Digital Infrastructure Risks

Recent drone attacks linked to Iran have struck data center facilities in the United Arab Emirates and Bahrain, raising concerns about the vulnerability of digital infrastructure in conflict zones. Facilities operating within the cloud network of Amazon Web Services were among the targets. These incidents highlight how modern conflicts increasingly extend beyond traditional military assets to include critical digital infrastructure.

Critical Infrastructure In The Crosshairs

Iranian drones struck two data centers in the United Arab Emirates on Sunday. A separate strike in Bahrain also affected infrastructure connected to regional cloud operations. The attacks occurred amid escalating tensions following U.S. and Israeli strikes on Iranian targets. Analysts say the incidents demonstrate how data centers are becoming strategic assets in geopolitical conflicts. Patrick J. Murphy, executive director of the geopolitical advisory unit at Hilco Global, said the attacks reflect a broader shift in how infrastructure is viewed in modern security planning. In his view, digital assets now carry strategic importance comparable to energy systems and telecommunications networks.

Industry Response And Strategic Repercussions

Companies operating cloud services in the region responded quickly to the disruptions. Organizations relying on Amazon Web Services infrastructure were advised to move workloads to alternative regions where possible. Major technology providers, including Microsoft and Google, have also reviewed contingency procedures following the incidents. The situation has underscored the importance of redundancy and geographic diversification in cloud infrastructure. Government authorities increasingly classify data centers as critical national infrastructure. Policymakers in the United States, the United Kingdom and the European Union have introduced measures aimed at strengthening the protection of digital assets. Security analysts expect the recent attacks to accelerate efforts to integrate cloud infrastructure into national security planning alongside sectors such as energy, water and telecommunications.

Developments And Industry Reactions

The events also come amid wider debates about the relationship between technology companies and national security policy. In a separate development, the U.S. government recently designated technology company Anthropic as a potential supply chain risk. The company’s chief executive, Dario Amodei, has indicated that the designation could face legal challenge. Technology firms with major operations in the Middle East are reassessing risk management strategies. Expanded multi-region data replication and stronger backup systems form part of these measures, according to Scott Tindall of Hogan Lovells. Meanwhile, comments from OpenAI chief executive Sam Altman have reignited discussion about the growing links between technology companies and government defence programmes.

Looking Ahead

The recent drone strikes illustrate the increasing strategic importance of digital infrastructure in global security dynamics. Data centers are gradually being treated as critical assets within geopolitical conflicts. Continued tensions are likely to prompt additional investment by governments and technology companies in strengthening protection of cloud infrastructure and improving operational resilience across global networks.

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