Labor costs in Cyprus rose 3.8% year on year in the second quarter of 2026, according to provisional figures from the Statistical Service, or Cystat.

The increase accelerated slightly from 3.4% in the first quarter and exceeded the 3.7% rise recorded a year earlier, pointing to continued pressure on employers’ staffing costs.

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Wages And Non-Wage Costs Both Rise

Wages and salaries per hour worked increased 3.9% from a year earlier, while non-wage costs rose 3.6%. Both rates were higher than in the first quarter, when wage costs increased 3.4% and non-wage costs 3%.

On an unadjusted basis, the total labor cost index rose to 121.87 in the second quarter, from 119.43 in the previous quarter and 117.38 a year earlier, using 2020 as the base year.

The wages and salaries index reached 122.20, compared with 119.79 in the first quarter and 117.64 a year earlier. The non-wage cost index rose to 120.48 from 117.92 and 116.33, respectively.

Quarterly Growth Also Picks Up

After seasonal adjustment, total hourly labor costs increased 1% from the previous quarter. Wages and salaries also rose 1%, while non-wage costs increased 0.9%.

That was faster than the quarterly growth recorded a year earlier, when seasonally adjusted total labor costs and wages each rose 0.6% and non-wage costs increased 0.5%.

The latest figures show that labor costs continue to rise in Cyprus, with both wages and additional employment expenses contributing to the increase.

Aegean Airlines swung to a €3.3 million net loss in the first half of 2026 as higher fuel and emissions costs and Middle East disruptions weighed on earnings. Passenger demand remained relatively resilient. Domestic traffic rose 6% to 3.28 million, while international traffic was broadly flat at 4.49 million.

Higher Costs Pressure Earnings

EBITDA fell 7% to €145.3 million, and EBIT dropped 35% to €38.5 million. Aegean moved from a €47.9 million net profit in the first half of 2025 to a €3.3 million loss.

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Fuel costs increased 11% to €184.3 million, while emissions costs doubled to €43.8 million. Maintenance expenses rose 15% to €112.1 million, and employee costs increased 7% to €105.1 million.

Aegean said higher fuel and emissions costs had a €40 million net impact after hedging. Foreign exchange movements added €14.1 million in valuation losses, compared with a €30.6 million gain a year earlier.

Second Quarter Returns To Profit

The second quarter provided some relief, with net profit reaching €18.5 million, although that was 66% below the €54.5 million recorded a year earlier.

Revenue rose 3% to €495.8 million, and passenger traffic increased 1% to 4.54 million. EBITDA fell 12% to €98.8 million, while EBIT declined 29% to €43.6 million.

Middle East Disruption Hits International Network

Flights across parts of the Middle East were suspended for four months from March to June, affecting direct and connecting traffic through Athens.

Chief Executive Dimitris Gerogiannis said the first half was “shaped by the initial impact of the war in the Middle East.” Total available seats still increased 3% to 9.69 million, while the load factor eased to 80.3% from 81.1%.

“Yields remained stable but also did not increase to offset the rise in fuel costs,” Gerogiannis said.

Aegean Keeps Investing

Passenger traffic rose 4.8% across the domestic and international networks in July and August, according to Gerogiannis. With jet fuel prices still roughly twice as high as at the start of the year, the airline plans to maintain disciplined capacity growth over the next six to eight months.

Five Airbus A321neo aircraft were delivered in the first half, bringing the Airbus neo fleet to 43 aircraft. Two more A321neos are expected by the end of September.

Aegean ended June with €956.1 million in cash and other financial investments, up €114 million year over year. Net debt stood at €676.4 million, while operating cash flow increased to €299.4 million from €228.9 million.

Interest rates in Cyprus moved in opposite directions in July 2026, with deposit returns falling while housing loan costs increased. The banking market remained more attractive for savers than the euro area average, while borrowing costs were also below the bloc-wide level.

According to the Central Bank of Cyprus (CBC), the average rate on new household deposits fell to 1.27% from 1.42% in June. At the same time, the average rate on new housing loans rose to 3.24% from 3.18%, compared with euro area averages of 2.10% for deposits and 3.54% for housing loans.

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Deposit Rates Continue To Ease

The CBC data cover every credit institution operating in Cyprus and refer to new euro-denominated deposits from euro area-resident households.

For deposits with an agreed maturity of up to one year, National Bank of Greece offered the highest household rate in July at 1.62%, slightly below 1.64% in June. Alpha Bank followed at 1.45%, up from 1.39%, while Eurobank and Societe Generale each offered 1.32%. Eurobank had paid 1.51% in June, while Societe Generale had offered 1.12%.

For corporate customers, Ancoria Bank offered the highest deposit rate at 1.94%, up from 1.60% in June. Alpha Bank followed at 1.66%, compared with 2.05% the previous month.

Housing Loan Costs Move Higher

The average interest rate on new euro-denominated housing loans to euro area-resident households rose to 3.24% from 3.18% in June, regardless of the initial rate-fixing period. The CBC said the figure covers new business and new loan agreements.

Even so, Cyprus remained below the euro area average of 3.54%. Among the institutions covered by the CBC data, Societe Generale recorded the highest household housing-loan rate at 3.55%, although no comparable June figure was available. Bank of Cyprus followed at 3.37%, up from 3.28%, while the Housing Finance Corporation recorded 3.31%, down from 3.36%.

The average rate on new loans of up to €1 million to companies also increased, reaching 4.51% from 4.16% in June.

Among lenders, Banque SBA reported the highest rate at 6.99%, followed by Societe Generale at 4.99% and Ancoria Bank at 4.79%.

A Banking System Rebuilt, But Debt Remains

The latest figures come against a broader backdrop of progress in Cyprus’ banking sector, where non-performing loans have fallen sharply in recent years. Yet the country’s wider private debt burden has not disappeared.

In an analysis published by the CBC, Xenios Socratous of the central bank’s risk analysis section said Cyprus had undergone a major transformation, moving from NPL levels that once approached half of total lending to a banking system whose asset-quality indicators are now broadly aligned with the EU average.

Socratous argued that the NPL problem was not simply a banking ratio but a broader macroeconomic constraint. High levels of bad loans tied up bank capital and limited banks’ ability to finance the economy, while heavily indebted households and businesses delayed spending and investment.

The clean-up involved stronger provisioning, dedicated arrears-management units, legal reforms, restructuring, debt-for-asset swaps and the sale of NPL portfolios, including Bank of Cyprus’ Project Helix. These measures helped strengthen bank balance sheets and release capital for new lending.

However, moving loans off bank balance sheets did not make the underlying debt disappear. Credit-acquiring companies now hold most problematic exposures, leaving borrowers with outstanding obligations and ongoing restructuring or recovery procedures, while unresolved NPLs can continue to weigh on the property market.

“Selling NPLs improves banks’ balance sheets, strengthens investor confidence and releases capital for new lending. The underlying credit risk, however, does not disappear. It is transferred to another creditor,” Socratous said.

Housing Security Returns To The Policy Agenda

Household debt has also returned to the European banking debate, with particular attention to vulnerable borrowers and primary residences. Cypriot MEP Michalis Hadjipantela has urged the Association of Cyprus Banks to strengthen protections for borrowers who have already repaid a substantial share of their mortgages but remain at risk of losing their homes.

His letter was also sent to the CBC and the European Central Bank, following European Parliament-backed provisions calling for adequate protection of primary residences, particularly for vulnerable households.

Cyprus and Greece are seeking to expand economic cooperation by attracting investment, strengthening economic diplomacy and helping businesses enter third markets.

The issue was discussed in Nicosia by Cypriot Foreign Minister Constantinos Kombos and Greek Deputy Foreign Minister Harry Theoharis during Theoharis’ two-day visit on Sept. 14 and 15, according to the Greek Foreign Ministry.

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Focus Shifts Toward Third Markets

Kombos said the talks focused on “strengthening economic diplomacy, investments, and joint business extroversion in third markets.” The approach would encourage companies from both countries to pursue opportunities abroad rather than limiting cooperation to bilateral trade and investment.

The existing economic relationship provides a strong base for that effort. Trade in goods between Cyprus and Greece reached €3.3 billion in 2025, with Greece remaining one of Cyprus’ key commercial partners, according to Energy Minister Michalis Damianos.

Business Ties Take Center Stage

Theoharis also met Damianos and Invest Cyprus CEO Marios Tannousis, as well as Cyprus Chamber of Commerce and Industry President Stavros Stavrou and Cyprus-Greece Business Association President Joseph Joseph.

The meetings focused on identifying new areas of cooperation, supporting companies expanding abroad and creating additional investment and trade opportunities.

Cooperation Amid A Changing Regional Landscape

Kombos and Theoharis also reaffirmed the countries’ strategic relationship and discussed regional developments and Greece’s upcoming presidency of the Council of the European Union in 2027.

Greece will hold the rotating presidency from July through December 2027, following Lithuania and as part of the 18-month trio with Ireland and Lithuania. The role allows Greece to help set the EU agenda, build consensus among member states and steer legislative work.

The broader economic agenda reflects a growing role for governments as facilitators of international business, using diplomatic ties to help companies build partnerships and access new markets.

Doing nothing with your savings is not a neutral choice. In Europe, it can mean losing purchasing power over time. Revolut’s European Wealth Drain Index, based on 20,007 adults across 20 EU member states and official deposit and inflation data, shows households holding cash while its real value declines.

Cash Is Losing To Inflation

In 12 of the 20 markets studied, average one-year deposit rates are below inflation. Across the sample, deposits pay 2.76% on average, compared with inflation of 2.94%.

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Revolut estimates households forgo €638 per €10,000 each year by keeping money in cash, compared with the MSCI Europe ETF’s 10-year annualized return of 9.06%. Across €6.3 trillion in liquid deposits covered by the study, that represents roughly €422 billion a year not flowing into investment.

Why Savers Stay Put

Two-thirds of respondents have never switched banks for a better rate. Among them, 26% prefer their existing bank, 18% see little difference and 15% do not know where to look.

Financial literacy is another barrier: 46% misjudge their inflation-adjusted returns, while 19% do not realize inflation affects cash. One in five Europeans has no savings.

Revolut Favors Lower Investment Barriers

Among non-investors, 29% cite perceived risk as the main barrier and 27% cite lack of knowledge. Revolut says active EU retail investors on its platform increased 56% year over year.

“Forced enrolment doesn’t tackle the root causes of inertia: perceived risk (29%) and a lack of knowledge (27%),” said Rolandas Juteika, Revolut’s head of wealth and trading. He said the median first-time EU investment on the platform is €18.

Europe’s Savings Divide

Central and eastern Europe has some of the widest gaps between inflation and deposit rates, led by Bulgaria at 2.3%, Slovakia at 1.7% and Lithuania at 1.3%. Meanwhile, 51% of respondents in both Bulgaria and Romania said they would consider starting to invest.

Germany has €1.9 trillion in deposits and France €588 billion, while fewer than 40% of respondents in Denmark and Sweden understand how inflation affects long-term wealth.

Brussels Wants Savings To Fund Investment

The findings come as the EU seeks to direct more private savings toward European investment. The European Commission estimates €10 trillion in household savings are held in bank accounts, while the Draghi report estimated Europe needs an additional €750 billion to €800 billion in annual investment by 2030.

The Savings and Investments Union, adopted in March 2025, aims to encourage investment through simpler savings accounts, pension reforms, securitization rules and changes affecting banks and insurers. The Commission estimates the measures could unlock as much as €470 billion in additional investment.

Von der Leyen has called for an agreement by the end of 2026, ideally involving all 27 member states, while leaving open the possibility of moving ahead with ready countries.

Cyprus’ job vacancy rate fell to 2.6% in the second quarter of 2026, down from 2.8% in the previous quarter and 3.3% a year earlier, according to data from the Statistical Service, or Cystat.

Vacancies declined by 975, or 7%, from 13,905 in the first quarter. The drop points to softer hiring demand, although several sectors continue to face staffing shortages.

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Hospitality Records Highest Vacancy Rate

Accommodation and food service activities had the highest vacancy rate at 4.6%, reflecting continued demand for workers in one of Cyprus’ most labor-intensive industries.

Transportation and storage and administrative and support services followed at 3.5% each, while construction recorded a 3.1% vacancy rate. Wholesale and retail trade stood at 3%.

Hospitality And Trade Have Most Openings

Accommodation and food service activities also recorded the largest number of vacancies, with 2,827 positions. Wholesale and retail trade followed with 2,286, while construction had 1,330.

Professional, scientific and technical activities recorded 874 vacancies, followed by transportation and storage with 859, manufacturing with 854, and administrative and support services with 789.

Public administration and defense had 665 vacancies, while human health and social work activities recorded 572. Information and communication activities had 441 openings, and financial and insurance activities had 398.

Vacancy Rates Vary Widely Across Sectors

Manufacturing and human health and social work activities each recorded vacancy rates of 2.2%. Publishing, broadcasting and content production, information and communication, and public administration and defense each stood at 2%.

Water supply and waste management and professional, scientific and technical activities recorded 1.9%, while other services stood at 1.8%, financial and insurance activities at 1.7%, and arts, sports and recreation at 1.5%.

Education had a vacancy rate of 0.7%, while electricity supply and real estate activities each stood at 0.6%. Mining and quarrying recorded no vacancies.

What Counts As A Job Vacancy

Cystat defines a job vacancy as a paid position that is newly created, unoccupied or about to become vacant, where an employer is actively seeking an external candidate and intends to fill the role immediately or within a specified period.

More than one in 10 consumers could routinely use AI agents to make online purchases on their behalf by 2030, according to a Mastercard report on the future of commerce.

The report, A Short History of the Future of Shopping and Payments, combines Mastercard research with forecasts from four AI and commerce experts.

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From Recommendations To Purchases

AI agents could handle routine purchases such as groceries, medicines and subscriptions, including negotiating prices for consumers. Smart devices such as watches and rings could also provide personalized product information before and after purchases.

“By 2030, buying a product and the shopping experience will not necessarily be the same thing,” said Magnus Lindkvist. “AI agents will take care of the most everyday purchases, leaving the shopping experience to be more closely associated with discovery, inspiration and enjoyment.”

Younger Consumers Are Moving First

Mastercard’s survey of 26,000 parents and teenagers aged 13 to 18 across 13 countries found that teenagers already use AI in purchasing decisions at roughly twice the rate of their parents.

Some 62% said AI will significantly change how their generation shops. Meanwhile, 31% would trust an AI product recommendation more than one from a friend, while 23% would trust AI more than their parents.

Retailers Will Need To Adapt

As AI agents make purchasing decisions, retailers will need to serve both consumers and software acting on their behalf. Product information, reviews, certifications, origin and sustainability data will need to be easy for AI systems to identify and verify.

Trust will be critical as agents gain authority to complete transactions. Businesses and financial institutions will need clear rules covering identification, consent, authorization and responsibility, Lau said.

Cyprus Tests Agentic Commerce

Mastercard said agentic commerce is already being tested in Cyprus. Earlier this year, it carried out what it described as the country’s first agentic transactions in a regulated environment with Alpha Bank Cyprus, Eurobank Limited and Bank of Cyprus.

Using Mastercard Agent Pay, AI agents completed purchases with consumers’ explicit consent. The trials were designed to maintain security, transparency and consumer control.

The tests offer an early example of infrastructure that could support a shift from AI recommendations to AI agents making purchases directly. Scaling the model will depend on both technology and clear rules governing how agents can act.

A company behind plans for a new cooperative bank in Cyprus has reported an attempted online scam to police after discovering fake websites and social media accounts targeting potential investors.

Fake Channels Target Prospective Investors

The Pancyprian Cooperative Society for Participation and Promotion of Cooperativism said unauthorized websites and profiles were posing as official sources of assistance for people seeking to buy shares in its ongoing offering.

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No individual, company or third party has been authorized to represent the group, mediate transactions or assist prospective members, it said.

Official Platforms Confirmed

Pancyprian Cooperative Society identified pccppc.cy as its only official corporate website. Membership applications and share purchases are handled exclusively through its dedicated share platform.

The warning comes as the company raises capital to establish a new cooperative credit institution in Cyprus. Its prospectus was approved by the Cyprus Securities and Exchange Commission on July 8, while the public offering opened July 22 and is scheduled to run until Nov. 17.

Capital Raise Underway

Up to 42 million new shares are being offered at a nominal value of €1 each, with a minimum online investment of €100.

Prospectus approval does not constitute an endorsement of the shares, and the proposed bank will still require the necessary licenses before beginning operations.

Public Urged To Verify Communications

Potential investors should avoid sharing personal or financial information through unofficial websites or social media accounts, the company said. Any communication should be verified through its official channels before a share purchase is made.

Support is available at 97913011, 97913012, 97913013 and 97913014, while potential investors are advised to use the company’s official channels for enquiries.

A police complaint followed the discovery of fake online material that the company said was designed to mislead and defraud people interested in the share offering.

Cyprus has increased adult participation in education and training over the past decade, but remains below the European Union average, according to Eurostat.

Participation Rises, But Gap Remains

In 2025, 12% of adults in Cyprus aged 25 to 64 had participated in formal or non-formal education and training during the previous four weeks. That was up from 7.5% in 2015, a 4.5 percentage point increase.

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Across the EU, participation reached 13.7% in 2025, compared with 10.1% a decade earlier. Cyprus therefore remained 1.7 percentage points below the bloc average.

Adult Learning Supports Workforce Skills

Education and training help workers update skills, adapt to new technologies and remain competitive as industries change. Employers also face growing demand for workers who can adjust to evolving business models and digital tools.

Eurostat tracks these figures as part of Sustainable Development Goal 4, which covers quality education and lifelong learning, including adult education and digital skills.

Cyprus Follows A Wider EU Trend

Adult learning participation increased across most EU countries over the past decade, despite a temporary decline in 2020 linked to the COVID-19 pandemic and related restrictions.

Sweden had the highest participation rate in 2025 at 38.2%, followed by Denmark at 31.0% and Finland at 28.1%. Greece recorded the lowest rate at 5.2%, followed by Bulgaria at 6.1% and Croatia at 6.5%.

Malta recorded the largest increase since 2015, at 12.3 percentage points, followed by Estonia at 11.9 points, Belgium at 11.1 and Slovenia at 10.9. Only France, Luxembourg and Denmark recorded declines.

Women And City Residents Participate More

Women were more likely than men to participate in adult learning in 2025, at 14.9% compared with 12.4%. Female participation increased by 4.0 percentage points from 2015, compared with 3.2 points for men.

Location also mattered. Participation reached 16.8% among adults living in cities, compared with 12.3% in towns and suburbs and 10.3% in rural areas.

Cyprus Still Has Room To Catch Up

Cyprus’ increase from 7.5% to 12% suggests more adults are continuing their education after entering the workforce. Higher participation can support skills development, employability and productivity as economies adapt to automation and digitalization.

The latest figures show Cyprus has made progress but still trails the EU average, particularly as lifelong learning becomes increasingly important to workforce competitiveness.

Companies that can control rapidly rising artificial intelligence costs may gain an advantage as AI models become increasingly commoditized, according to PwC.

The professional services firm said AI cost-control tools are becoming widespread and standardized, making them necessary to compete but less useful as a differentiator. Disciplined spending could also free capital for additional AI initiatives and create a compounding advantage.

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One global technology company reportedly cut the cost of each AI run by 65% to 80%, allowing it to run three to five times as much AI on the same budget.

Why AI Spending Keeps Rising

Token prices are falling, but total AI spending continues to increase as lower unit costs encourage broader deployment. More workflows can also mean more calls, retries and system dependencies.

“Everyone tries to use AI everywhere, even if it just makes workflows more complex and expensive,” PwC said, noting that access to the same underlying models limits the competitive value of higher spending.

Companies also often lack visibility into token consumption and where waste occurs.

Hidden Costs Add Up

AI expenses can accumulate across planning, tool use, retrieval, reasoning, orchestration, safeguards, logging and review. Indirect infrastructure costs are also often excluded from initial budgets.

Agent-based systems can increase spending further by creating plans, delegating tasks, retrieving information or repeating processes when results fall short.

Model costs vary sharply, with PwC estimating that one million tokens can cost anywhere from pennies to $50. Choosing the cheapest model is not necessarily the best option because weaker systems can create additional work, poor decisions or compliance problems.

Financial Discipline Can Reduce Waste

PwC recommends examining three sources of AI cost overruns: rates, such as supplier price changes; volume, including excessive calls and retries; and mix, meaning the wrong model tier for a task.

Its operating model calls for assessing cost and value before development, redesigning systems to eliminate waste, linking spending to business outcomes and reinvesting savings in additional AI projects.

Companies can reduce costs by limiting unnecessary context, combining tasks into fewer calls, setting spending limits and routing work to the least expensive suitable model. PwC said these controls should be built into AI systems through budget limits, routing rules, workflow thresholds and audit trails.

Human Oversight Still Matters

Automated controls do not replace human oversight. PwC said technology should flag decisions for review and provide the information needed to align actions with business priorities.

In the technology company case study, the approach cut average runtime from 12 hours to four hours while maintaining output quality. PwC recommends tracking the cost of each AI workflow against its business outcome, putting AI spending on the CFO’s agenda and preparing for more outcome-based vendor pricing.

Discipline May Define The Next AI Advantage

PwC said companies should start with their most valuable AI applications, where better cost management and governance can deliver the greatest returns.

“The next round of AI advantage won’t go to whoever runs the most powerful models,” PwC said, noting that many companies will use the same underlying systems.

“Advantage will likely go to whoever runs them with more discipline,” the firm concluded.