AGP Executive Report

Agriculture Push: Cyprus is rolling out a €109.3m “Strategy for the Development of the Primary Sector” through 2029, aiming to lift the sector’s GDP contribution (currently 1.8%). A completed 2025 evaluation says the €106.2m investment could generate €138.6m in total output, add €70.8m to GDP and create around 1,370 jobs, with funding via the CAP and national resources. Banking & Elections: With elections reshaping Parliament, Cyprus banks’ strong post-2022 profits may face renewed political pressure when lawmakers return in September, including talk of a windfall tax and changes to banking laws—though banks are wary of higher taxation. State Milestone: President Nikos Christodoulides marked 66 years since the Republic’s proclamation, calling the state Cyprus’ “most important achievement” and stressing priorities on security, economic upgrading, modernising the state and improving quality of life. Connectivity Upgrade: A new undersea cable, Ugarit 2, is set to connect Cyprus and Syria by early 2028, replacing the older 1995 link and boosting capacity for regional digital connectivity. Energy Link Scrutiny: Commentators are urging a reality check on the Great Sea Interconnector, questioning viability, governance and assumptions in feasibility work, plus route and cost risks.

Cyprus Economy: Cyprus GDP grew 3.3% year-on-year in Q2 2026, outpacing the euro area and EU as growth accelerated to 0.8% quarter-on-quarter. Housing Market: New-home sales slid sharply in Q2, with new-build apartment and house transactions down 42.2% and value down 46.6%, though demand appears to have shifted toward lower- and mid-priced homes. Energy Infrastructure: The Great Sea Interconnector faces fresh scrutiny after a call for a “reality check” on viability, governance and assumptions in earlier studies, as Cyprus-Israel power-link investment steps move forward. Connectivity & Telecoms: Cyta and partners are building the Ugarit 2 undersea cable to connect Cyprus and Syria, targeting service by early 2028 with higher capacity than the current link. Finance & Remittances: Citizens Bank PLC partnered with Cyprus-based Nec Pay to expand inward remittances from Europe, supporting Bangladeshi expatriates and families. Tourism & Costs: Turkey’s coastal hotel prices are easing amid weaker demand tied to the Iran war, with Cyprus also seeing price declines, while last-minute booking patterns shift. Environment: Cyprus-linked research highlights invasive lionfish being turned into food as the Mediterranean’s non-native species surge continues.

Cyprus Growth Watch: Cyprus’ economy accelerated to 3.3% annual growth in Q2 2026, outpacing the euro area and EU, with GDP up 0.8% quarter-on-quarter. Property Market: New-home sales slid sharply in Q2, with new-build apartments and houses down 42.2% by volume and value down 46.6%, though demand appears to have shifted toward lower- and mid-priced homes. Tourism & Travel: Cyprus’ tourism picture is mixed: Paphos airport passenger traffic rebounded, while hotel operators warn of revenue pressure despite August demand; separately, Iran-war-linked weakness is reported to be pushing down Turkey’s coastal hotel prices. Energy & Infrastructure: Cyprus’ first utility battery project has entered commercial operation, and the Cyprus–Israel power link is moving through the next investment stages. Finance & Banking: Citizens Bank PLC partnered with Cyprus-based Nec Pay to expand inward remittances from Europe, supporting Bangladeshi expatriate flows. EU Rules Impact: The EU’s biometric Entry/Exit System is driving long border queues and holiday plan changes, adding pressure to travel demand across Europe. Environment & Food: Cyprus is turning invasive lionfish into food as Mediterranean seas warm and non-native species spread faster. Regional Diplomacy: Egypt and Cyprus’ foreign ministers highlighted momentum in economic, investment, energy and tourism cooperation, including faster implementation on Egyptian worker employment in Cyprus.

Property Market Shift: Cyprus’ new-home market lost momentum in Q2, with new-build apartment and house sales down 42.2% by volume and 46.6% by value, but demand didn’t vanish—buyers appear to have moved toward lower- and mid-priced homes (up to €300,000), while Nicosia showed relative strength. Macroeconomy: Cyprus GDP grew 3.3% year-on-year in Q2 2026, outpacing the eurozone and EU, with quarterly growth also improving to 0.8%—supported by trade, vehicle repairs, ICT, finance/insurance and construction. Investment Funds: The Central Bank of Cyprus reported 353 investment funds in June, with assets rising 2.5% to €8.37bn. Energy Infrastructure: Cyprus-Israel power-link projects moved into the “money stage,” with investment requests and approvals progressing. Tourism & Tech: Cyprus is pushing AI-driven upgrades to tourism services and exploring an AI/fintech workforce strategy. Finance & Markets: Cyprus’ investment funds growth and bank lending targets remain in focus, alongside ongoing developments at the Cyprus Stock Exchange.

Cyprus Economy: Cyprus GDP grew 3.3% year-on-year in Q2 2026, outpacing the eurozone and driven by trade, repairs, ICT, finance and construction. Investment Funds: The number of investment funds in Cyprus rose to 353 in June, with assets up to €8.37bn. Energy Infrastructure: IPTO submitted an investment approval request for the Cyprus–Israel Great Sea Interconnector, saying the project is viable and will boost supply security and renewables integration. Sports Transfers: Aris Limassol rejected Kortrijk’s second €800,000-plus-add-ons offer for midfielder Alex Opoku Sarfo, with talks ongoing. Tourism & Tech: Cyprus is pushing an AI-driven “Smart Tourism” strategy to 2032, while separate coverage highlights Cyprus’ growing AI and fintech ambitions. Regulation & Markets: Cyprus’ used-car sector faces new EU recycling rules, and Cyprus’ stock market saw suspensions tied to company reporting.

Banking Outlook: Greek banking groups with Cyprus operations posted stronger-than-expected Q2 results, with faster lending growth and rising fee income helping analysts lift 2026–27 targets for Eurobank and Alpha Bank. Energy & Infrastructure: The Great Sea Interconnector (GSI) project advanced as Greece’s grid operator filed an investment request for the Cyprus–Israel section, moving regulators toward decisions on cross-border cost allocation. Tech & Skills: Cyprus pushes AI and fintech growth, but a skills mismatch is emerging as STEM enrolment lags while demand for STEM-linked jobs rises. EU Rules for Cars: New EU recycling rules entered into force, tightening controls on used-car exports and raising recycled-plastic requirements, with major provisions starting from 1 Sept 2028. Local Economy & Costs: Paralimni secured planning permission for a town-centre redevelopment aimed at boosting shop activity and visitor access, while consumer groups renewed scrutiny of Cyprus fuel price rises. Trade Links: The Cyprus Chamber of Commerce and Industry in Australia outlined follow-up work to expand trade and investment opportunities across tech, finance, renewable energy, education and healthcare. Sports Business: Aris Limassol midfielder Alex Opoku Sarfo drew reported interest from Belgian side KV Kortrijk, with his €1m market value and contract until May 2028 in focus. Tourism & Culture: Paphos’ August programme highlights mostly free cultural events, including outdoor cinema and music nights. Public Safety & Migration: A UN report flagged increased migrant deaths on the Central and Eastern Mediterranean routes, including more drownings linked to the Greece–Cyprus corridor. Aviation Memory: Cyprus marked the 21st anniversary of the Helios Airways Flight 522 crash.

Electricity Interconnector: IPTO has submitted the next formal investment request for the Great Sea Interconnector, with regulators in Cyprus and Israel now set to assess costs and how the cable will be recovered—an undersea link aimed at ending Cyprus’ electricity isolation. Tourism Demand: Paphos Airport reported a 7% rise in passenger traffic in July year-on-year, with UK, Greece, Israel and Poland among the biggest contributors as the summer season stabilises. AI for Tourism: Cyprus is consulting on a “Smart Tourism 2032” plan to embed AI across tourism services, positioning the island as a “Living Lab” and focusing on adoption by small and medium-sized operators. Crypto & Regulation: Cyprus is pushing on-site audits for crypto custodians, while separate coverage highlights how founders should think about licensing based on the specific activity—not just the “best licence.” Energy & Geopolitics: EU imports of Russian-derived petroleum via intermediaries rose in July, with Spain and Cyprus among top recipients—another sign sanctions are being routed through third countries. Local Business Pulse: Entertainment venues say August is busy but customers remain cautious, with occupancy around 80% and calls for more flexibility on hiring non-EU catering workers. Security & Infrastructure: The UK is buying extra air-raid warning sirens for RAF Akrotiri to cover both the base and Akrotiri village. Crossing Controls: Customs at Agios Dometios seized 245kg of cattle hides and entrails in a car, with the driver fined and the goods destroyed.

Central Bank of Cyprus: The CBC has extended the deadline for tenders to mint, package and deliver Cyprus euro silver and gold collector coins, pushing submissions to September 25, 2026 (from September 4) and keeping the lowest-price award basis. Capital Markets: The Cyprus Stock Exchange extended the suspension of Reputation Exchange Plc shares for another two months, until October 19, 2026, citing the lack of a listing adviser and the missing 2025 annual report. Corporate Finance: Demetra Holdings continued its buyback, repurchasing 3,660 shares on August 12 at €1.465 each under its approved scheme. Energy & Infrastructure: The Great Sea Interconnector project advanced as Greece’s Admie submitted an investment request for the Cyprus–Israel electricity link to both countries’ regulators under EU TEN-E rules. Regional Power Link Push: US lawmakers urged support for the Great Sea Interconnector as a strategic gateway for the IMEC corridor. Tax Reform Watch: A guide on Cyprus tax reform 2026 highlights common filing mistakes companies still make after the new rules took effect. MFSA Governance: Malta’s MFSA chief said it’s easier to keep “bad players” out than to license and punish, underscoring a tougher stance on market conduct. Tourism Outlook: Paphos hoteliers expect 85–90% occupancy in August, while Famagusta targets 80–85%, with pricing pressure and more last-minute demand shaping results.

Energy Interconnector Push: US lawmakers are urging the Trump administration to back the Great Sea Interconnector, a planned undersea power link connecting Israel–Cyprus–Greece, estimated at over $2bn and backed by EU funding. Crypto & Markets: CySEC has imposed €126,500 in fines on twelve Cyprus companies, while Cyprus Stock Exchange is set to suspend trading in six firms over financial reporting issues. Tourism & Hotels: Cyprus hotel demand remains mixed: Famagusta sees a lift from last-minute bookings, while Paphos hoteliers warn of a revenue squeeze despite August activity. Aviation Safety Check: Cyprus transport authorities say inspections found no safety concerns over Ryanair operations after a passenger incident on a Thessaloniki–Munich flight. Cyber/Consumer Fraud: Police report a Nicosia woman losing over €2,200 in an online accommodation scam, warning the public not to pay via links sent by messages. Education & Growth: NKUA’s Cyprus branch says applications are surging, with a 20% acceptance rate for its medical school, as facilities and dorm access are completed. Business & Economy: Cyprus trade dynamics stay in focus, with reports on the trade deficit widening and broader signals of economic slowdown easing. Media Freedom: The Cyprus Journalists’ Union raises alarm over three criminal cases involving journalist Makarios Drousiotis, warning of risks to press freedom.

Power & Infrastructure: US lawmakers are urging the Trump administration to back the Great Sea Interconnector, a planned undersea link tying the electricity grids of Greece, Cyprus and Israel into the India–Middle East–Europe Economic Corridor (IMEC). Property Market: Cyprus logged 2,040 property sale contracts in July, topping 2,000 for the first time this year, while January–July transfers reached €2.70bn. Tourism Pressure: Paphos hoteliers expect August occupancy to rebound to 85–90%, but warn revenue is still under strain from falling room prices and weaker autumn bookings. AI & Retail Exports: Cyprus-based Powersoft365 will showcase eight operational AI retail agents at the Indonesia Retail Summit & Expo in Jakarta, aiming to scale in Asian markets. Local Governance: A cabinet reshuffle changed leadership at Cyprus’ deputy ministries for Social Welfare and Culture, reigniting debate over continuity and political interference. Cyber & Fraud Watch: Cyprus police issued a fresh warning after a rise in phone and message scams targeting account details and financial security. Fire Readiness: The forestry department completed training for operators of 17 new fire engines, boosting wildfire response capacity. Fintech Hiring: Cyprus remains the top global hiring hub for online trading firms, with AI increasingly showing up in job descriptions. CSE Corporate Update: Upyachting Management PLC has rebranded as UP Ventures PLC, effective August 13.

Telecom Infrastructure: UNIFI Communications, Syrian Telecom and CYTA signed a construction and maintenance deal for the UGARIT 2 subsea cable, a 240-km repeaterless link between Cyprus (Pentaskhinos) and Syria (Tartous), targeting early-2028 service and replacing the 1995 UGARIT system. Tourism & Trade: Larnaca hotel occupancy fell about 15% in July versus last year amid Middle East uncertainty, though August bookings are holding around 75% of capacity so far, with hope pinned on last-minute demand and renewed flights. Local Governance & Partnerships: Larnaca is set to twin with Bahrain’s capital Manama after a Bahraini cabinet approval, as Cyprus and Bahrain deepen cooperation across defence, shipping, investment, tourism and technology. Capital Markets: The Cyprus Stock Exchange will suspend trading in six companies from Aug. 13 for failing to publish 2025 annual financial reports, with suspensions initially lasting two months. Public Policy: Pension reform timelines face pushback as unions say draft bills for the first pillar are not yet in hand, casting doubt on a September parliamentary tabling. Business & Economy: A CypERC forecast points to Cyprus growth slowing to 2.7% in 2026 while inflation rises to around 3%, leaving households feeling prices more than output. Corporate Actions: Demetra Holdings bought back 3,630 shares on Aug. 10 at €1.46 each as part of its CSE capital management plan. Innovation Spotlight: A Cyprus biotech founder won the UK Study Alumni Awards global prize for Business and Innovation, highlighting the island’s biotech and entrepreneurship reach.

Energy & Public Finance: Cyprus expects its first natural gas revenues in 2028, tied to Cronos field production, with Aphrodite developments pencilled in for the second half of 2027. Aviation & Tourism Demand: Hermes Airports says Cyprus airports handled 1.63 million passengers in July, narrowing the year-on-year decline to about 1% and keeping 2026 traffic forecast 3%-5% below last year if conditions stay favourable. Power & Renewables Storage: Petrolina Electric’s 5 MWh utility battery project (Pavlina Memorial Energy Park) has entered commercial operation, aiming to cut solar curtailment as Cyprus struggles to absorb fast-growing renewables. Public Safety Tech: SafeIsland CY, a new wildfire reporting and alert app, goes live in a pilot to help communities spot smoke and hazards faster via an interactive map. Health & Social Impact: Blood stocks are at critical levels ahead of the August 15 holiday period, with daily demand around 350 units but scheduled collections expected at roughly 190-200. Business Outlook: The Cyprus Composite Leading Economic Index fell 0.43% year-on-year in July, but the decline is easing, suggesting the slowdown may be stabilising. Environment & Fisheries: Scientists warn warming seas and the Suez Canal are accelerating invasive species like lionfish in the Mediterranean, threatening native ecosystems and fisheries. Regional Positioning: Cyprus is pushing itself as a stable EU logistics hub amid regional disruption, with Limassol at the centre of the plan.

Banking Momentum: Eurobank, NBG, Piraeus and Alpha expanded credit by €8.8bn in H1 2026, with business lending up and profits holding strong; Bank of Cyprus and other lenders lifted total credit growth above €13bn. Cyprus Trade: Cystat says the trade deficit widened to €4.68bn in the first half of 2026 as imports rose faster than exports. Bank of Cyprus Outlook: Euroxx raised forecasts and its target price after stronger-than-expected results, pointing to a high dividend yield. Energy & Power: Cyprus is set to supply natural gas to Europe by mid-2028, while the TSO reports demand is easing and fully covered as temperatures fall. Electricity Links: Cyprus and Greece move closer on interconnector plans, with investors backing the Great Sea Interconnector. Defence & Shipping: Cyprus renewed trilateral defence cooperation with Greece and Jordan, and also deepened ties with Bahrain across defence, shipping and investment. Blood Supply Watch: The Cyprus blood bank warns supplies are at borderline levels and urges donations over the coming weeks. Food & Agriculture: Carob growers demand a minimum price of 65 cents/kg or they will skip harvest; carob sector pressure grows with higher costs and low yields. Regulatory & Markets: CySEC fined 12 companies €126,500, while Cyprus’ crypto custody resilience review continues across the EU. Social Climate: Cyprus topped the EU ADL Global 100 ranking for elevated antisemitic attitudes, with 58% reporting higher stereotypes.

Energy & Investment: MOL Group will buy Shell’s BG Cyprus Ltd, taking a 35% stake in the Aphrodite offshore gas field (Block 12) in a deal valued up to $720m, while Cyprus’ Cronos gas project is set to supply Europe via Egypt by March 2028/first half of 2028 after TotalEnergies and Eni’s final investment decision. Shipping & Regulation: Cyprus and Greece ship managers are watching the IMO carbon pricing debate closely, where competing proposals could sharply change compliance costs and overlap with EU ETS/FuelEU rules. Property & Finance: Cyprus is consulting on an overhaul of forced property sales, including private valuers for reserve prices and a fixed 15% auction reduction after a failed sale, aiming to cut long-running cases. EU-Turkey Policy: A Cyprus foreign ministry internal memo says Nicosia is tracking eight EU-Turkey cooperation dossiers and may move to block progress if island interests are threatened. Local Economy & Services: Nicosia municipal offices and key markets will close on August 15, with waste collection unaffected. Business & Consumer Impact: Eurostat data shows Romania has the highest share of people unable to afford a week-long holiday (61.4%), highlighting uneven consumer pressure across Europe. Marine Insurance: Accredited Insurance (Europe) and Hellenic Hull have launched a delegated authority partnership as Hellenic Hull becomes Accredited’s first dedicated MGA partner for hull & machinery and marine cargo. Telecom: Ucom says it’s expanding international roaming and 5G roaming coverage, with roaming users up 29% in Q2 and mobile data usage up 26% quarter-on-quarter.

Energy & Markets: Cyprus Energy Minister Michael Damianos says the Cronos gas field could start supplying European consumers as early as March 2028, with partners TotalEnergies and Eni moving ahead after a final investment decision; the plan is to pipe gas to Egypt’s Zohr, liquefy it at Damietta, and ship it to Europe—positioning the Eastern Mediterranean as an alternative amid Ukraine and Middle East disruption. Power Infrastructure: Damianos also hailed French investor Meridiam’s backing for the Great Sea Interconnector, while warning red tape over the cable’s cost could push higher electricity bills for Cypriot consumers unless EU and private funding offsets the gap. Regulation & Finance: CySEC will join ESMA in EU-wide digital resilience audits for crypto custody providers, with on-site and desk reviews planned from H2 2026 to H1 2027. Trade & Food Security: The Philippines imposed a temporary ban on importing live animals and certain animal products from seven FMD-affected economies including Cyprus, after SAT1 outbreaks were confirmed by lab testing. Cost of Living: A new look at supermarket pricing shows sharp swings—some essentials up sharply while others fall—adding pressure as fuel costs remain volatile. Local Governance & Planning: Nicosia Metropolitan Park and SOPAZ redevelopment plans are still stuck in procedural delays, with residents concerned about timelines and the local plan.

Energy & Markets: Cyprus’ Cronos natural gas field is set to feed European buyers by the first half of 2028, with the minister saying the project is a timely alternative as Europe looks beyond Russia amid Middle East turmoil. Cyprus Peace Process: UN chief Antonio Guterres has warned that the Cyprus problem can’t be kicked down the road, urging preparation for a 5+1 meeting and pushing confidence-building, methodology and key substance. Diplomacy & Security: Turkey’s Hakan Fidan again rejected the Greek Cypriot side as a state and said peace depends on Turkish troops, while also calling for continued international isolation of Israel. Local Business & Red Tape: A Limassol resident describes repeated road transport department hurdles during vehicle re-registration, highlighting how bureaucracy can stall even straightforward paperwork. Tourism Demand: Israeli media reports Cyprus is emerging as a go-to August short-break destination for Israelis, citing affordability, safety and flight connectivity. Regulation & Compliance: Cyprus’ CySEC has imposed €126,500 in fines on twelve companies, underscoring ongoing enforcement in the financial sector. Transport Disruption: Complaints continue after baggage handling failures at Birmingham Airport left passengers without luggage, with costs and communication issues raised by travellers. Environment & Water: Cyprus is using DNA-based monitoring (eDNA) for routine water checks, with the EU’s research centre noting the island as one of the few adopters. Shipping & Connectivity: The Cyprus–Greece ferry route is secured through 2027, but subsidy decisions for 2028 are still pending.