Cyprus’ Industrial Production Index rose to 113.0 points in December 2025, marking a 3.5% increase compared with the same month a year earlier, according to data from the Cyprus Statistical Service. The figures suggest continued industrial momentum as the country’s production base expands across several manufacturing segments.

Overview Of Economic Momentum

Based on the 2021 reference value of 100 points, industrial output maintained an upward trend throughout 2025. For the full year, production increased by 3.6%, reflecting steady growth supported by manufacturing activity and ongoing industrial investment.

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Sector Analysis: Winners And Losers

Manufacturing remained the main driver of growth, expanding by 4.6% in December. Water supply and materials recovery also contributed, rising by 3.2%.

Other sectors showed weaker performance. Electricity supply declined by 2.4% compared with December 2024, while mining and quarrying fell by 1.7%, highlighting uneven performance across the industrial landscape.

In-Depth Manufacturing Performance

Within manufacturing, furniture production and related activities, including machinery repair and installation, recorded one of the strongest gains, rising 13.8% year over year.

Wood and cork products, excluding furniture, increased by 11.9%, while machinery, motor vehicles, and transport equipment production rose by 8.1%.

Annual Trends And Segment Challenges

For the full year, the manufacture of other non-metallic mineral products posted the strongest growth, rising 10.9% compared with 2024. Wood and cork products grew by 9.1%, while basic metals and fabricated metal products increased by 8%.

Furniture-related activities expanded by 7.2%. At the same time, paper products and printing declined by 9.5%, while textiles, apparel, and leather products fell by 3.8%. Electricity supply recorded a full-year decline of 2%, underscoring differences in sector performance.

Outlook

The latest data points to continued growth in Cyprus’ industrial sector, led primarily by manufacturing. At the same time, weaker performance in energy and selected manufacturing segments highlights areas where productivity and investment strategies may shape future industrial performance.

Piraeus Bank reported profitability of €1.1 billion in 2025, with return on tangible equity reaching 16%, excluding extraordinary items. The results reflect continued earnings growth and stronger operating performance as the bank expands lending activity and diversifies revenue sources.

Impressive Profitability In 2025

The bank posted a net profit of €250 million in the fourth quarter of 2025. Net interest income reached €477 million during the quarter, up 1% sequentially, supported by higher loan volumes and stable asset performance. Net interest margin remained at 2.25%, reflecting disciplined balance sheet management amid a changing interest-rate environment.

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Solid Fourth Quarter Performance

Fourth-quarter results showed improving momentum, supporting the bank’s annual net interest income target of €1.9 billion. Lending activity contributed to stronger fee generation, with net fee income rising to €206 million, up 23% year over year. Growth was supported by asset management fees, investment banking activity, and bancassurance services.

Diversification Of Income Streams

Fee-based income continued to play a larger role in overall profitability. Net fee income accounted for 29% of total net revenues, reaching €696 million for the year and exceeding the bank’s target of €650 million. The inclusion of Ethniki Asfalistiki in consolidated results also expanded the bank’s service portfolio and supported revenue diversification.

Strategic Moves And Sustainable Growth

CEO Christos Megalou said in an interview that 2025 was shaped by strong execution and strategic expansion. The bank recorded an 11% increase in its loan portfolio, with net credit expansion reaching €4 billion, above annual targets.

With improved asset quality and a growing share of fee-based income, management says the bank is positioned to maintain stable performance as market conditions evolve.

Looking ahead, Piraeus Bank plans to present updated targets at its Capital Markets Day in London on March 5, 2026. The bank currently holds €66 billion in deposits and €14.5 billion in investment funds under management, highlighting its scale within the Greek banking sector.

European Central Bank President Christine Lagarde told a European Parliament committee that artificial intelligence is already contributing to productivity gains across the eurozone. At the same time, she said concerns about large-scale job losses remain largely theoretical at this stage.

Her remarks reflect a growing policy focus on how AI adoption may reshape economic performance while raising longer-term questions about labor markets.

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AI As A Catalyst For Productivity

The integration of artificial intelligence into various industries is yielding tangible efficiency gains. According to Lagarde, current developments indicate that AI is effectively boosting productivity levels, reinforcing its status as a transformative force in today’s business landscape. This growth trajectory underscores the potential for AI to drive future economic resilience.

Vigilance Over Labour Market Implications

Despite productivity improvements, Lagarde said there is no clear sign so far of widespread employment disruption linked to AI adoption. She noted that while automation is influencing how businesses operate, it has not yet resulted in large-scale layoffs. The ECB continues to monitor labor market indicators as technology adoption expands.

A Balanced Perspective On Technology And Jobs

The discussion highlights a broader policy challenge for Europe: supporting innovation while maintaining labor market stability. Policymakers are increasingly focused on ensuring that productivity gains from AI translate into sustainable economic growth without creating abrupt employment shocks. Lagarde’s comments reflect the ECB’s position that the impact of AI on jobs remains uncertain and will depend on how companies, workers, and regulators adapt in the coming years.

Cyberattacks targeting the global maritime sector rose by 103% in 2025, according to the 2026 Maritime Cyber Threat White Paper published by CYTUR Inc. The report shows incidents increasing from 408 in 2024 to 828 in 2025, highlighting a sharp escalation in cyber risks affecting shipping operations.

Rapid Rise In Targeted Attacks

Data collected through CYTUR-TI, the company’s maritime threat intelligence platform, highlights growing exposure linked to the digitalization of vessels. As ships integrate satellite communications with onboard operational technology (OT), threat actors are increasingly targeting systems that directly influence vessel operations rather than focusing only on data theft. The shift marks a broader change in risk, moving cyber incidents closer to core operational functions.

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Operational Technology Under Siege

Recent incidents have affected systems beyond traditional IT networks, including ballast water management, propulsion controls, Integrated Automation Systems, ECDIS, and AIS navigation tools.

Disruptions to these systems can create safety and navigational risks, as compromised operational technology may interfere with vessel stability, propulsion, or route data. Industry analysts note that the impact of cyber incidents is increasingly measured not only in financial terms but also in operational and safety exposure.

Satellite Communication Vulnerabilities

The growing use of satellite connectivity onboard ships has introduced new points of risk. VSAT links, widely used for monitoring and predictive maintenance, are becoming key targets for attackers.

The report highlights vulnerabilities in satellite management software that can create single points of failure. One 2025 case study cited in the white paper described coordinated attacks that disrupted communications across more than 100 vessels simultaneously.

Supply Chain Risks And Industry-Wide Implications

Cyber risks are also expanding across the maritime supply chain. Attackers increasingly target shipyards, equipment manufacturers, and software providers, creating the potential for malicious code to spread through vendor updates. Ransomware incidents involving maritime electronics suppliers demonstrate how disruptions at a single manufacturer can delay maintenance and safety-related upgrades across fleets. Researchers also report growing activity on dark web forums involving vessel access credentials and leaked technical data.

Regulatory Pressure And Compliance Shifts

Regulatory frameworks are tightening as cyber risk becomes a core operational issue. Under the International Association of Classification Societies’ Unified Requirements UR E26 and UR E27, cybersecurity controls must now be incorporated during vessel design and construction.

The International Maritime Organisation also requires cyber risk management within safety management systems under Resolution MSC.428(98), while the EU’s revised NIS2 Directive extends cybersecurity obligations to critical transport operators.

Together, these measures signal a shift from documentation-based compliance toward operational verification and resilience.

Regional Focus: Cyprus As A Maritime Cyber Hub

Cyprus, home to more than 220 shipping-related companies and one of the largest merchant fleets in the EU, is increasingly exposed to these risks as fleet operations become more digital.

Shipping Deputy Minister Marina Hadjimanolis said in an interview that digital transformation remains central to competitiveness, while cybersecurity is becoming a necessary condition for operational continuity.

Looking Ahead: The Path To Enhanced Resilience

Yong-hyun Cho, CEO of CYTUR Inc., said that data from 2024 and 2025 reinforce the view that maritime cybersecurity is no longer optional but a core requirement for vessel operations. The white paper aims to provide stakeholders with practical insights for navigating evolving cyber threats and an increasingly complex regulatory environment.

The completion of the liquefied natural gas (LNG) terminal upgrade in Vasiliko has become a key issue for Cyprus’ National Petroleum Company (ETYFA) and the Ministry of Energy, as authorities work to address delays and operational constraints tied to the project.

Completion Challenges And Operational Bottlenecks

One of the main challenges involves finalizing ongoing construction and technical work linked to the LNG terminal upgrade. Officials are managing delays while attempting to maintain energy supply stability and ensure the project remains aligned with long-term energy planning. The complexity of the infrastructure and regulatory requirements has added pressure to project timelines.

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Management Of The Prometheus Vessel

A second major issue concerns the Prometheus vessel, which was converted into a floating storage and regasification unit (FSRU) intended to support LNG operations in Cyprus.

Authorities are exploring options to test the vessel’s capabilities and potentially lease it as an interim solution before deployment in Cyprus. However, current European Commission rules restrict the use of the vessel for profit-generating operations at foreign terminals, as EU funding for its conversion was granted specifically to support Cyprus’ energy needs.

European Regulatory Constraints And Cyprus’ Strategy

Cyprus is seeking regulatory clarity from the European Commission regarding future use of the vessel. Although the project initially received €101 million in EU funding, earlier procedural issues resulted in partial repayment, with approximately €68 million returned from €71 million already disbursed.

Officials argue that the project has since relied largely on domestic financing and loans from institutions including the European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD). They say greater flexibility in using the vessel could help reduce operational costs while preserving asset readiness.

Successful Conversions And Future Implications

Government sources say technical modifications to the Prometheus have been completed, and the vessel is currently moored at the Kuala Linggi Base in Malaysia under the management of Norwegian firm Wilhelmsen.

The main unresolved issue remains regulatory approval, as prolonged inactivity could increase costs and delay the broader LNG strategy tied to Cyprus’ energy transition.

Rapid Onset Of A Livestock Emergency

Cyprus’ livestock sector is facing growing pressure following the spread of hemorrhagic fever across several free-range farming areas. Authorities report 11 affected facilities and around 13,000 animals considered at risk in regions including Livadia, Oroklini, Troulloi, and Aradippou.

Estimated compensation costs have reached approximately €4.5 million, covering livestock losses as well as related products such as milk and reproductive material.

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Intensified Epidemiological Investigations

Veterinary Services have launched extensive epidemiological investigations aimed at identifying the source and transmission pathways of the outbreak. Law enforcement authorities are also assisting in inquiries related to possible delays in reporting initial cases.

Officials say early notification remains critical for limiting the spread of animal diseases and reducing economic impact on producers.

Strict Emergency Measures Enforced

Following confirmation of the outbreak on February 20 in a cattle unit in Livadia, the government activated its Emergency Action Plan under Regulation 2020/687. Authorities believe the virus may have been circulating earlier in nearby areas.

Key measures include:

• Checkpoint Controls And Disinfection
  Police and veterinary teams have established control points and disinfection units in affected zones, including Aradippou, Livadia, Keleia, Troulloi, and Oroklini.

• Movement Restrictions
  Transportation of cattle, sheep, goats, pigs, and related feed is restricted without special authorization.

• Product Control Measures
  Milk from affected facilities is being removed from the supply chain, while controlled disposal procedures for infected animals are underway.

• Hunting And Outdoor Activity Restrictions
  Hunting and dog training activities have been suspended in affected areas to reduce environmental transmission risks.

Political Pressure And Industry Concerns

The outbreak has intensified debate within the Parliamentary Committee on Agriculture, where lawmakers reviewed earlier containment measures introduced in late 2025 after initial suspicions of disease activity.

While laboratory tests conducted in nearby zones previously returned negative results, farmers continue to express concern over economic losses and uncertainty. Authorities say inspections and biosecurity controls will remain in place as monitoring continues.

International Veterinary Cooperation And EU Response

Amid the grim scenario, the EU veterinarian team from Brussels (EUVET) offers a global perspective. With the imminent arrival of 10,000 vaccine doses today from a reserve of 500,000 doses sent to occupied areas, and another 10,000 expected next week, the rollout will be managed under the expertise of EUVET, who remains on the island until Friday.

Notably, although only 11 premises have so far reported contamination, early incidents in a cattle farm and two large sheep stations in the Larnaca district had already captured international attention. In light of this outbreak, the European Commission is set to authorize measures, including a decisive culling of animals at affected farms, destruction of animal products, and comprehensive facility disinfection.

Export Challenges And Future Precautions

Following the outbreak, the World Organisation for Animal Health (WOAH) suspended Cyprus’ disease-free status, temporarily affecting exports of susceptible live animals and certain untreated animal products.

EU guidelines require strict controls within designated restriction zones, including movement monitoring, facility sanitation, and regulated handling of animal products. Authorities say dairy products from affected farms must be managed under controlled conditions to ensure safety.

Moving Forward

Additional measures are expected in the coming days, including expanded vaccination efforts and continued surveillance. Officials say coordination between national authorities, veterinary experts, and EU partners will be central to limiting the spread of the disease and stabilizing the livestock sector.

Clear Commitment To Transparency

The Deputy Ministry of Research, Innovation and Digital Policy said it remains committed to transparency and legal compliance following an audit report examining the Digital Citizen project. In its response, the ministry rejected suggestions of opacity in the contracting process, stating that procedures were carried out in line with national and European legal frameworks.

Response To Audit Findings

Addressing the Auditor’s report, the ministry said the document raised procedural questions but did not identify evidence of misconduct or legal violations.

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Officials also disputed claims regarding the timing of legal oversight. According to the ministry, the Legal Service was involved from April 2024 during the drafting of the cooperation memorandum and continued to participate throughout the final agreement process, alongside legal representatives from the Greek Ministry of Digital Governance.

Rigorous Implementation And Contractual Integrity

The Digital Citizen project was developed as part of an intergovernmental cooperation between Cyprus and Greece that began in November 2023. The ministry said the partnership was based on European legal provisions that allow cooperation between member states in delivering public digital services.

Officials noted that contractual safeguards were included to protect public interests and that standard provisions, such as 20 days for acceptance of deliverables, follow common practice in similar agreements. Both Cypriot and Greek legal teams were involved throughout the review process, the ministry added.

Financial Prudence And Future Strategic Options

According to the ministry, the project’s cost structure was shaped by the use of existing infrastructure and an already developed technological solution, reducing implementation time and resources compared with building a new system from scratch.

Looking ahead, officials said future development phases may be handled through an open tender process. Options under consideration include expanding the current application to align with European requirements or developing a separate solution as the European Digital Identity Wallet (EUDI) framework continues to evolve.

Conclusion: A Model Of Digital Transformation

The ministry said the Digital Citizen project forms part of Cyprus’ broader digital transformation strategy and highlighted cross-border cooperation with Greece as a factor that accelerated implementation.

As European digital identity initiatives continue to develop, the project is expected to remain under regulatory and policy review, with transparency and governance continuing to be key areas of focus.

Overview Of The 2025 Government Budget Implementation

The General Accounting Office reported solid execution of the 2025 government budget, with revenues reaching 87% of projections and expenditures reaching 92% of planned levels. By comparison, execution rates in 2024 stood at 96% for revenues and 91% for spending.

Projected state revenue for 2025 totals €10.20 billion, down from €10.81 billion in 2024, while planned expenditures declined to €11.99 billion from €12.42 billion a year earlier.

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Revenue Performance: Borrowing Contractions And Tax Increases

The decline in overall revenue was largely driven by reduced borrowing, which fell to €0.10 billion from €1.17 billion in 2024. The shortfall was partially offset by stronger tax collection.

Direct taxes increased by €0.37 billion, while indirect taxes rose by €0.17 billion. VAT receipts reached €3.16 billion, up from €3.08 billion in the previous year, supported by higher consumption activity. Direct tax revenues rose 6%, driven mainly by higher personal and corporate income tax collections, which reached €3.79 billion.

Expenditure Management: Lower Debt Costs And Higher Social Support

On the expenditure side, reduced loan repayments lowered overall spending by €0.84 billion. At the same time, social benefits and transfers increased.

Social benefits rose by €0.10 billion to €2.02 billion, reflecting higher healthcare-related spending and increased allocations to the Renewable Energy Sources Fund. Transfers and grants grew by €0.18 billion, reaching €1.93 billion, supported by higher contributions to the Social Security Fund and increased subsidies to municipalities.

Development And Capital Expenditures: Infrastructure Focus

Capital expenditure execution reached €469.3 million in 2025, with investment concentrated in road infrastructure, construction projects, water and wastewater systems, and public facilities, including educational buildings.

Co-financed projects totaled €336.3 million, supporting non-governmental initiatives such as education and child nutrition programs, housing renovation schemes, and digital transformation projects.

Historical Context And Overall Performance

The report notes that average government spending execution over the past decade has been around 91%, placing 2025 in line with historical performance. Development expenditure execution reached 81%, improving from the long-term average of 69%, partly reflecting a €67.1 million reduction in the initial budget allocation.

For further details on the state budget and fiscal performance, you may refer to the official report by the General Accounting Office and the continuing analysis available from financial news platforms, including reports on government budgeting.

Germany’s economy grew by 0.3% in the fourth quarter of 2025, supported by stronger domestic consumption and higher construction investment, according to revised data from the Federal Statistical Office (Destatis). The result helped Europe’s largest economy close the year on a firmer footing after a period of uneven economic performance.

Domestic Demand Fuels Growth

Household and government consumption were the main drivers of growth in the final quarter. Increased domestic spending helped offset external economic pressures and supported overall stability. For the full year, Germany recorded growth of 0.2%, rising to 0.3% when adjusted for calendar effects, reflecting modest but positive momentum.

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Investment In Construction

Construction investment also contributed to the expansion, providing additional support to economic activity during a period of broader uncertainty. The sector’s performance suggests continued demand for infrastructure and housing-related projects, which could remain an important factor for growth in the coming quarters.

Strategic Outlook

Ruth Brand, President of Destatis, said in an interview that sustained domestic consumption played a central role in supporting economic activity at the end of the year. Looking ahead, analysts are likely to focus on whether consumer spending and investment levels remain stable as Germany navigates shifting global demand and ongoing economic adjustments. The fourth-quarter performance highlights the role of domestic demand in stabilizing growth and offers a more constructive starting point for the year ahead.

Escalating Cyber Threat Landscape

Recent nationwide surveys conducted by the Communications Commissioner and the Digital Security Authority reveal that cyberattacks in Cyprus are not only frequent but are intensifying. Over the past 12 months, one in three individuals and more than half of businesses reported experiencing a cyber incident, highlighting growing pressure on digital security systems.

Business Under Siege

A survey of 459 companies across multiple sectors, conducted between September and November 2025, found that 53% experienced a cyberattack or data breach within the past year. The figure marks an increase from 47% in 2024 and 49% in 2023.

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On average, businesses reported one cyberattack every eight days, compared with one every 10 days a year earlier. Among affected companies, 51% reported financial losses averaging €12,000, slightly lower than previous results.

Phishing remains the most common attack method, accounting for 44% of incidents. Although the share has declined slightly, 75% of companies said phishing was the most recent form of attack they encountered.

The survey also found gaps in preparedness. Nearly one in four organizations had not updated cybersecurity policies in more than a year, while only 22% participated in cybersecurity training initiatives in 2025. Companies that invested in training reported stronger defensive outcomes.

Individual Vulnerability

A separate survey of 1,043 individuals conducted between August and September 2025 showed that people faced an average of 25.9 cyberattack attempts during the year, slightly below previous levels.

Around one-third of respondents said they had been affected by a cyber incident, with 17% reporting financial losses averaging €141. The 35–44 age group recorded the highest financial impact, marking a shift from earlier trends that showed higher exposure among younger users.

Phishing remained the leading attack method for individuals, representing 22% of incidents.

Despite widespread exposure to cyber risks, awareness levels remain limited. Among respondents who had not experienced an attack, 89% said they were uncertain about their future online safety. In addition, 74% were unaware of available cybersecurity training programs.

Those who attended seminars reported practical changes, including stronger password practices, regular updates, and increased caution when interacting with unfamiliar online environments.

Strengthening Cybersecurity Measures

In response, the Digital Security Authority plans to expand educational outreach through seminars and awareness campaigns aimed at both businesses and individuals.

The initiative is designed to strengthen cybersecurity resilience across Cyprus as organizations and consumers face a growing volume of digital threats.