Category: Cyprus News Agency

New lending in Cyprus increased significantly in May 2026, driven by strong growth in housing loans, while the average interest rate on new mortgages rose to 4.06%, according to the latest interest rate and lending statistics released by the Central Bank of Cyprus.

Pure new loans increased to pound 361.9 million in May, compared with pound 331.3 million in April. The strongest increase was recorded in housing loans, which rose to pound 145.5 million from pound 106.0 million a month earlier. Consumer loans also increased to pound 23.9 million from pound 21.8 million, while new loans to non-financial corporations of up to pound 1 million climbed to pound 63.4 million from pound 39.4 million. By contrast, new business loans exceeding pound 1 million declined to pound 121.5 million from pound 156.8 million.

As regards interest rates on new lending, the average rate on housing loans increased to 4.06% from 3.73% in April, while the rate on consumer credit fell to 6.95% from 7.19%. The interest rate on loans to non-financial corporations of up to pound 1 million edged up to 4.27% from 4.20%, whereas the rate on loans above pound 1 million declined to 3.85% from 4.08%.

At the same time, deposit rates increased, with the interest rate on household time deposits with an agreed maturity of up to one year rising to 1.25% from 1.20%, while the corresponding rate for non-financial corporations increased to 1.31% from 1.23%.

The Central Bank’s analysis shows that interest rates on new loans in Cyprus remain broadly in line with the euro area median. More specifically, interest rates on new housing loans are 0.2 percentage points below the euro area median, while new business lending rates are 0.2 percentage points above it.

By contrast, deposit rates continue to rank among the lowest in the euro area, a development which the Central Bank attributes mainly to the high level of liquidity in the Cypriot banking system.

Regarding the pass-through of the European Central Bank’s monetary policy decisions, the Central Bank’s analysis indicates that Cyprus is broadly aligned with the rest of the euro area in the transmission of interest rate changes to outstanding loans. For new housing loans, the pass-through of both interest rate increases and decreases is also broadly comparable with the euro area average.

However, the pass-through to new corporate loans appears weaker during both periods of ECB monetary tightening and monetary easing. At the same time, the pass-through of changes in ECB rates to new deposit rates remains weaker in Cyprus than in most euro area countries, a trend reflected in the relatively low deposit rates offered by Cypriot banks.

The report also highlights a notable shift in the composition of new mortgage lending, with the share of loans carrying a floating interest rate, or an initial fixed-rate period of up to one year, declining sharply in recent years.

In May 2026, the share stood at 17.8%, down from almost 100% at the beginning of 2022, indicating a growing preference among borrowers for loans with fixed interest rates during the initial years of repayment.

Cyprus has joined the European response to the severe wildfires affecting France by deploying two rescEU firefighting aircraft, as the European Commission stepped up assistance through the EU Civil Protection Mechanism (UCPM), the European Commission has announced.

According to the Commission, France activated the Mechanism on 5 July following multiple large wildfires burning simultaneously across the country. In response, the Commission mobilised four rescEU firefighting aircraft from Sweden and Cyprus, which are expected to arrive in the affected areas today.

Portugal activated the Mechanism on 3 July after devastating wildfires broke out across the country. Within hours of the request, 118 firefighters and 45 vehicles from Spain arrived on the ground, while three rescEU firefighting aircraft from Italy and Spain were also deployed.

The Commission noted that this year’s wildfire season has seen a record deployment of European firefighting resources. A total of 777 firefighters from 14 European countries are already, or will soon be, strategically pre-positioned in high-risk areas across Cyprus, Greece, Italy, France, Spain and Portugal. In parallel, the EU’s rescEU fleet has 22 firefighting aircraft and five helicopters on standby to assist Member States facing major wildfire emergencies.

Commissioner for Equality, Preparedness and Crisis Management Hadja Lahbib said that as Portugal and France face an extreme wildfire threat during the ongoing heatwave, “every minute matters.”

She said the EU Civil Protection Mechanism had once again delivered rapid assistance where it was most needed, with aircraft, ground teams and vehicles from Sweden, Cyprus, Italy and Spain already supporting emergency crews. She stressed that Europe stands united in protecting lives, communities, livelihoods and the natural environment.

The Cyprus Composite Leading Economic Index (CCLEI) remained in negative territory in June 2026, recording a year-on-year decline of 0.65%, reflecting continued external pressures and subdued economic activity amid heightened geopolitical uncertainty, according to the Economics Research Centre (CypERC) of the University of Cyprus.

The Centre said the latest annual decline follows similar contractions recorded in previous months, indicating that the short-term outlook for the Cypriot economy continues to be weighed down by an uncertain international environment.

The negative performance of the CCLEI was driven primarily by the weighted Economic Sentiment Indicator (ESI), which combines economic sentiment in Cyprus and the euro area. The indicator remained below its June 2025 level, mainly reflecting weaker business and consumer confidence in Cyprus.

Additional downward pressure came from higher year-on-year Brent crude oil prices, while the temperature-adjusted volume of electricity production and tourist arrivals also posted annual declines.

However, several components of the index continued to provide support to economic activity, limiting the overall negative impact. Positive contributions came from the value of transactions with Cypriot credit cards, the retail sales volume index, and property sales contracts.

Overall, CypERC said the June reading suggests that the Cypriot economy continues to face short-term challenges stemming mainly from the uncertain international economic and geopolitical environment. At the same time, the resilience shown by domestic consumption and the property market indicates that some sectors continue to underpin economic activity.

The CCLEI is designed to provide early warning signals of turning points in Cyprus’ business cycle. It is compiled using a range of leading indicators that tend to precede changes in overall economic activity, including the Economic Sentiment Indicator, Brent crude oil prices, tourist arrivals, Cypriot credit card transactions, retail sales, property sales contracts, and temperature-adjusted electricity production.

According to CypERC, the June 2026 estimate is based on available weekly data for Brent crude oil prices and electricity production, monthly data on the Economic Sentiment Indicator for Cyprus and the euro area, as well as preliminary data on property sales contracts, tourist arrivals, and retail trade.

European Commission officials paid Cyprus a visit 2 and 3 of July in the context of the Annual Performance Review Meeting of the Cohesion Policy Programme “THALIA2021-2027”, focusing on the progress of the Programme’s implementation and the impact of Cohesion Policy investments in Cyprus.

According to a press release by the Directorate General Growth of the Ministry of Finance, representatives of the DGs for Regional and Urban Policy (DG REGIO) and Employment, Social Affairs and Inclusion (DG EMPL) of the European Commission participated in the deliberations of the Annual Performance Review Meeting, organised by the DG Growth as the Managing Authority of the Programme, with the participation of representatives of competent Ministries and other involved bodies.

During the meeting, they were presented with the progress of the implementation of the ‘THALIA2021-2027’ Programme and they reviewed the progress towards fulfilling the necessary conditions for its implementation and discussed the priorities of its mid-term review.

The representatives of the European Commission also carried out on-site visits to projects co-financed by the ‘THALIA2021-2027’ Programme, covering areas related to the green transition, research and innovation, environmental protection, sustainable urban development and social cohesion.

The Cohesion Policy Programme “THALIA2021-2027” is the largest public investment development programme implemented in Cyprus, with a total budget of pound 1.8 billion, of which pound 969 million comes from the European Union and pound 842 million from national resources.

The Programme finances investments that promote the green and digital transition, strengthen the competitiveness of the economy, create quality jobs and improve the quality of life of citizens throughout Cyprus.

Cyprus’ construction sector recorded modest growth in activity during the first quarter of 2026, while construction prices continued to rise at a faster pace, according to data released on Monday by the Statistical Service of Cyprus.

The Index of Production in Construction reached 120.74 points (2021=100) in the January-March period, marking a 0.7% increase compared with the first quarter of 2025.

The figures indicate that construction activity continued to expand, albeit at a significantly slower pace than the 5.2% annual growth recorded for 2025 as a whole.

At the same time, cost pressures in the sector remained elevated. The Output Prices Index in Construction rose to 129.46 points during the first quarter, up 4.7% from the corresponding period of 2025 and 3.0% higher than in the fourth quarter of 2025.

Shipping Deputy Minister to the President, Marina Hadjimanolis, departs on Monday for a working visit to London, where she will attend an event organised by the Deputy Ministry of Shipping at the International Maritime Organization (IMO) to promote Cyprus shipping.

The event takes place within the framework of the IMO Council sessions, in the presence of the Secretary-General of the Organization, Arsenio Dominguez, and representatives of IMO member states, a Deputy Ministry press release said here today.

During her stay in London, Hadjimanolis will hold a bilateral meeting with the Chairman of the General Authority for Transport of Saudi Arabia, Eng. Fawaz Al Sehali, focusing on strengthening cooperation between the two countries in the field of shipping.

She will meet with representatives of shipping companies, aiming to enhance cooperation and promote the Cyprus registry and Cyprus shipping in general, the press release concludes.

The Department of Meteorology has issued a yellow warning for isolated heavy thunderstorms on Monday.

As stated, isolated heavy thunderstorms are expected to affect the mountainous areas, the inland areas and the north. the precipitation rate is locally likely to exceed the 35 millimeters per hour.

According to the Department, the warning will be in effect from 12 p.m. on Monday until 6 p.m.

The Cyprus issue will be among the key topics on the agenda when European Council President António Costa and European Commission President Ursula von der Leyen meet Turkish President Recep Tayyip Erdogan in Ankara on Wednesday, alongside broader discussions on EU-Trkiye relations and regional developments.

According to a press release issued by the European Council, Costa will travel to Ankara on 7-8 July. On Tuesday, he will attend the leaders’ dinner at the NATO Summit, before joining von der Leyen for talks with Erdogan on Wednesday.

The three leaders are expected to exchange views on regional developments, with particular emphasis on the ongoing diplomatic efforts led by the Secretary-General of the United Nations to achieve a settlement of the Cyprus issue, its is noted.

The meeting will primarily focus on bilateral EU-Turkey relations, against the backdrop of an increasingly complex geopolitical environment that has underscored the need for enhanced dialogue and cooperation based on shared interests and pragmatic engagement, the press release said.

The two sides are also expected to review progress in implementing the Joint Communication adopted in November 2023 by the European Commission and the High Representative, which sets out a roadmap for advancing political, economic and trade relations between the EU and Trkiye.

The European Council press release rnoted that the EU and Trkiye are “strategic partners,” with their relationship anchored in the 1963 Association Agreement, also known as the Ankara Agreement. It also said that the EU remains Trkiye’s largest trading partner. In 2022, bilateral trade reached pound 198.1 billion, accounting for 3.6% of the European Union’s total trade with the rest of the world.

Cyprus has been divided since 1974, when Turkey invaded and occupied its northern third. Repeated rounds of UN-led peace talks have so far failed to yield results. The latest round of negotiations, in July 2017 at the Swiss resort of Crans-Montana ended inconclusively.

Cyprus Police participated in a global operation against human trafficking named “GLOBAL CHAIN” during which 1,024 arrests were made in five continents.

A police announcement says that within the framework of the operation, the Office for Combating Human Trafficking carried out a total of 17 operations across the islands, in various premises (ie pubs, apartments).

During the raids, 57 women were identified. The Police clarified in the press release that following an individual assessment, no indications were found that they were victims of human trafficking. One of them was found to be residing illegally in the Republic of Cyprus.

Figures from the global operation

The global operation from 8 to 12 June was carried out with the aim of combating trafficking in persons for the purposes of sexual exploitation, forced criminal activity and begging.

Europol supported the operation, in which the competent authorities of 59 countries participated. As part of the operation, 2,070 potential victims were identified and 1,024 suspects were arrested, of whom 334 are alleged to be involved in trafficking cases.

As part of the ongoing investigations, a further 201 suspects were identified for offences related to human trafficking.

The operation focused on combating trafficking in persons for the purposes of sexual exploitation, forced criminal activity and begging, with particular emphasis on the protection of minor victims.

The operation was implemented within the framework of the European Multidisciplinary Platform against Criminal Threats (EMPACT), with Austria coordinating the operational action and Romania acting as co-leader.

During the operation, 1,024 arrests were made, of which 334 for human trafficking offences and 690 for other criminal offences.

Moreover 2,070 victims and potential victims were identified (1,908 adults and 162 minors), 201 additional suspects were identified and 465 new criminal investigations were initiated. At the same time, 80 cases of document forgery were identified.

According to the results of the investigations so far, the vast majority of the victims are adult women. Specifically, 64.2% were trafficked for sexual exploitation, 20.9% for forced criminal activity, 11.3% for forced labor, 1.5% for begging and 2.1% for other forms of exploitation.

Of particular concern is the fact that 86.4% of child victims were trafficked for sexual exploitation.

In addition, 6.2% were trafficked for forced labor, 3% for begging, approximately 0.6% for forced criminal activity, while 3.8% were trafficked for other forms of exploitation. In many cases, protecting victims becomes particularly difficult, as their exploitation is carried out even by members of their own family.

Potential victims mainly from Latin American countries

The operation involved more than 40,000 law enforcement officers from 59 countries, including police, border guards, labor inspectors, tax and customs officials.

Potential victims were identified from 45 different countries, with the majority coming from Colombia, Argentina, Venezuela, Nepal and Moldova. Many of the victims had been transported across borders, even between different continents, demonstrating the international nature of criminal human trafficking networks.

During the operation, checks were carried out on 565,470 persons, 360,317 travel and other identification documents, 140,737 vehicles, 20,342 premises and other locations, 6,133 flights and water vehicles.

The KIOS Research and Innovation Center of Excellence at the University of Cyprus has joined the European CITADEL Range project to strengthen Europe’s cyber defence capabilities through advanced training and exercise technologies.

CITADEL Range project- Cyber Infrastructure for Training in Advanced Defence Exercises and Learning Range – funded by the European Defence Fund (EDF), aims to study, design, prototype, test, and qualify a suite of cost-effective and advanced cyber range tools and frameworks tailored to prepare the EU and its Member States’ armed forces for delivering full-spectrum cyber defence operations.

The project directly addresses key challenges in enhancing Europe’s cyber defence posture and enabling coordinated responses across Member States. While current practices largely focus on cybersecurity protection measures, operational cyber defence training remains costly and fragmented, particularly when it comes to developing high-fidelity cyber ranges. To overcome these limitations, CITADEL Range will deliver seven interoperable solutions connected through a common protocol. These solutions will integrate with existing cyber ranges rather than creating new infrastructures, thereby reducing costs while significantly improving realism, interoperability, and operational readiness.

CITADEL Range is an EU flagship large-scale project, coordinated by SIHTASUTUS CR14 (Estonia), involving 36 partners from across 19 EU Member States, including academia, industry, SMEs, NGOs, and organizations from the public and private sectors. This broad participation ensures multidisciplinary expertise and strong alignment with operational needs at both national and EU levels. The project will run for 42 months, with a total budget of more than 60 million. Moreover, more than 19 Ministries of Defence from European Countries are co-funding the project.

The project is coordinated by SIHTASUTUS CR14 (Estonia) and involves 39 partners from across Europe, including academia, industry, SMEs, NGOs, and organizations from the public and private sectors. This broad participation ensures multidisciplinary expertise and strong alignment with operational needs at both national and EU levels.

The KIOS Research and Innovation Center of Excellence at the University of Cyprus will play a crucial role in the project’s research activities, including state-of-the-art analysis and active contribution to the technical implementation of the proposed solutions. KIOS will lead significant research and development efforts in key domains such as Artificial Intelligence, and Digital Twin technologies, contributing to three of the seven pillars of the project’s overall scope. Leveraging its expertise in critical infrastructure systems and cyber-physical security and resilience, the Center will support the development of advanced, interoperable digital tools designed to enhance operational realism, strengthen coordinated cyber defence capabilities, and promote cross-border collaboration among EU Member States.

The KIOS CoE research team participating in this project consists of Professor Maria K. Michael, Dr. Christos Laoudias, Research Lecturer, Dr. Kyriakos Christou, Senior Software Engineer, Dr. Vasilis Ieropoulos, Research Associate and Theofanis Eleftheriades, Software Engineer.