Central Bank Of Cyprus Lowers Growth Forecasts Amid Middle East Conflict

The Central Bank of Cyprus (CBC) has lowered its GDP growth forecasts for 2026 and 2027 as the conflict in the Middle East continues. Growth is now expected to reach 2.5% in 2026, down 0.2 percentage points from previous projections, while the estimate for 2027 stands at 2.9%. Inflation risks, meanwhile, are expected to remain elevated.

Rising Inflationary Concerns

Updated projections also point to higher inflation. Headline inflation is now forecast at 3.2% in 2026, 0.5 percentage points above earlier estimates. According to the CBC, the increase mainly reflects the impact of the conflict in the Middle East. Core inflation, which excludes energy and food prices, remains unchanged at 2.3%.

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Sectors Under Strain And Market Dynamics

Sectors linked to international investment, including tourism, shipping, construction, and real estate, could come under pressure from higher oil prices and growing geopolitical uncertainty, the bank said. Further risks stem from possible fuel shortages and supply chain disruptions, which could add to price pressures affecting energy, industrial goods, and food.

Risk Factors And Outlook

Under its baseline scenario, the CBC assumes the conflict will continue until the final quarter of 2026 before gradually easing. Risks to growth remain tilted to the downside, while inflation risks continue to point upward. Much will depend on both the duration and intensity of the hostilities.

Among the factors highlighted by the bank are fuel shortages, higher energy and import costs, and pressures linked to climate change. A possible agreement between the United States and Iran would represent a positive development. Uncertainty persists, however, as the deal has yet to be finalized.

Domestic Demand And Resilient Labor Market

Despite the external challenges, rising disposable incomes and private consumption are expected to support domestic demand. Additional support is projected to come from non-residential private investment, although short-term geopolitical developments could affect the timing of some projects. Labour market conditions are expected to remain relatively stable, with only a slight increase in unemployment forecast.

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Only 1% Of Cyprus Farms Use Precision Farming Technologies

by THEFUTURE.TEAM

July 24, 2026

Cyprus remains one of the European Union’s least digitised agricultural economies, with just 1% of farms using precision farming technologies in 2023, according to Eurostat.

The findings come as the EU continues to encourage the adoption of digital tools aimed at improving agricultural productivity, efficiency and sustainability.

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Internet Access Expands, But Digital Uptake Lags

Internet access has improved across the bloc, although adoption remains uneven. Eurostat found that 43% of EU farms had internet access in 2023, with northern and central European countries leading the way.

Denmark, Germany, Slovakia, Latvia, the Czech Republic and Austria all reported internet access rates above 90%.

Greater connectivity, however, has not translated into widespread digital adoption. Farm management information systems, which help farmers manage day-to-day operations, were used by only about 11% of EU farms. France was a notable exception, with around 60% of farms using the technology.

Precision Farming Concentrated In Larger Operations

Robotics adoption also remained relatively limited, with only about 7% of EU farms using robotic technologies. Overall, around 18% of farms with utilised agricultural area employed at least one precision farming technology or practice in 2023.

These included robotics for plant protection, band spraying, variable-rate application, precision crop monitoring and soil analysis. Despite representing fewer than one in five farms, these holdings accounted for around 44% of the EU’s utilised agricultural area.

The figures suggest that precision farming remains concentrated among larger agricultural businesses, where investment in digital technologies is typically easier to support.

Cyprus Lags Behind EU Leaders

Luxembourg, Finland and Estonia recorded the highest shares of utilised agricultural area managed by farms using precision farming technologies, each exceeding 75%.

At the other end of the ranking, Cyprus recorded just 1%, while Greece and Romania reported between 10% and 15%. The results indicate that Cyprus remains at an early stage of digital adoption in agriculture, even as precision farming becomes more widespread across parts of the European Union.

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