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Cyprus Economic Outlook Turns Positive As Domestic Activity Supports Growth

by THEFUTURE.TEAM

September 18, 2026

Cyprus’ short-term economic outlook returned to positive territory in August, despite continued external pressures, according to the Composite Leading Economic Index (CCLEI) from the University of Cyprus Economics Research Centre (CypERC).

The CCLEI rose 0.02% year over year in August 2026, based on revised data, after several months of decline. The modest increase reflected stronger readings in several domestic indicators, including property sales contracts, credit card spending, retail sales volumes and temperature-adjusted electricity production.

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External Pressures Continue To Weigh

Higher Brent crude prices and lower tourist arrivals compared with a year earlier limited the improvement in the index. The weighted Economic Sentiment Indicator also weakened from August 2025, adding to the external pressures facing the economy.

CypERC said the latest reading pointed to a gradual improvement in the short-term outlook while noting Cyprus remains exposed to international economic and geopolitical developments.

CBC Forecasts Slower Growth In 2026

The latest CCLEI reading comes as the Central Bank of Cyprus (CBC) expects economic growth to slow this year before recovering.

GDP is forecast to grow 2.9% in 2026, compared with 3.8% in 2025, before accelerating to 3.1% in both 2027 and 2028. The CBC nevertheless raised its June forecasts by 0.4 percentage points for 2026 and 0.2 points for 2027, citing stronger-than-expected second-quarter activity, improved tourism performance and robust residential investment.

Domestic Demand Remains A Key Support

Private consumption is expected to remain positive as households benefit from higher real disposable incomes, although inflationary pressures will persist. The labor market and major residential and non-residential projects are also expected to support activity.

Long completion timelines and expectations that geopolitical disruption will be temporary make cancellations of major investment projects unlikely, according to the CBC.

Net Exports Expected To Weigh On Growth

Net exports are forecast to make a negative contribution to growth in 2026, largely because tourism revenue declined in the first half of the year amid the Middle East conflict. Higher imports are also expected as domestic demand remains strong and imported services support export activity.

A stronger contribution from net exports is projected for 2027 and 2028 as tourism recovers.

Outlook Improves But Remains Exposed To External Shocks

The CCLEI and CBC forecasts point to continued support from domestic demand and investment alongside exposure to energy prices, tourism flows and geopolitical developments.

August’s marginal increase in the leading index therefore signals a modest improvement in the short-term outlook, while the CBC expects slower growth in 2026 followed by a recovery in the next two years.

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EU Agrees On Major Overhaul Of Financial Market Supervision

by THEFUTURE.TEAM

October 9, 2026

European Union finance ministers have reached agreement on a sweeping package designed to strengthen oversight of the bloc’s financial markets, in a move aimed at reducing fragmentation and improving the flow of capital across borders.

A Push To Deepen Capital Markets

The Market Integration and Supervision Package, or MISP, would grant the European Securities and Markets Authority direct supervision over major market operators that are currently regulated by national authorities. The reforms are intended to make Europe’s capital markets more integrated, more efficient and better able to channel savings into productive investment.

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According to the Irish presidency, the package is meant to help savings and investments move more freely across the European Union, improving access to finance for companies while giving households broader opportunities to earn returns on their savings.

What The Reform Would Change

Under the new framework, ESMA would take direct oversight of key trading venues, clearing houses, securities settlement bodies and crypto-asset service providers. The package would also establish a permanent, independent executive board within the regulator, strengthening its institutional capacity.

Market operators would be able to opt into a new EU-wide operating framework. In parallel, the reforms would seek to make national supervision more consistent and update rules governing trading, transaction completion, investment management and the use of blockchain technology.

Why The Agreement Matters

Supporters of deeper capital markets argue that Europe has long paid a price for regulatory inconsistency. While many rules are harmonised across the bloc, differences in enforcement and supervision have contributed to a patchwork system that can make cross-border investment slower and more costly.

A more integrated framework, proponents say, could lower costs for companies seeking funding and broaden the menu of investment options available to savers and institutional investors alike.

Outstanding Questions Remain

Despite the broad agreement, some important details remain unresolved. Trading venues operated by Deutsche Börse, the company behind the Frankfurt stock exchange, may remain outside ESMA’s direct supervision.

Euronews previously reported that Germany had secured an exemption for Deutsche Börse’s domestically focused trading venues, leaving part of the system under regional supervision. The latest announcement did not clarify whether that arrangement will stand.

A Step Forward For The Savings And Investments Union

Dutch Finance Minister Eelco Heinen welcomed the deal, calling it a major advance for the Capital Markets Union and saying Europe had made more progress in 10 months than in the previous 10 years.

The agreement is an important milestone in the Savings and Investments Union, the EU’s broader effort to channel more of Europeans’ savings into investments that can support growth, innovation and competitiveness across the bloc.