Cyprus maintained stronger economic growth than both the euro area and the European Union in the first quarter of 2026, according to estimates released by Eurostat, despite a slowdown from the previous quarter.

The figures published by the European Union’s statistical office showed that Cyprus’ gross domestic product (GDP) expanded by 0.2 per cent quarter-on-quarter in the January to March period.

This marked a slowdown from the 1.2 per cent increase recorded in the fourth quarter of 2025.

Compared with the same period of the previous year, the Cypriot economy grew by 3 per cent, down from 4.3 per cent in the fourth quarter of 2025.

Annual growth in Cyprus had stood at 3.6 per cent in the third quarter of 2025 and 3.7 per cent in the second quarter of 2025.

Despite the moderation, Cyprus significantly outperformed the wider euro area and the EU.

According to Eurostat, seasonally adjusted GDP in the euro area declined by 0.2 per cent in the first quarter of 2026 compared with the previous three months.

GDP across the EU fell by 0.1 per cent over the same period, the figures showed.

In the final quarter of 2025, both the euro area and the EU had recorded quarterly growth of 0.2 per cent.

On an annual basis, euro area GDP increased by 0.3 per cent, following growth of 1.2 per cent in the previous quarter.

Annual growth in the EU reached 0.7 per cent, down from 1.4 per cent in the fourth quarter of 2025.

The United States continued to outperform Europe, with GDP increasing by 0.4 per cent quarter-on-quarter after growth of 0.1 per cent in the final quarter of 2025.

Compared with the same quarter of the previous year, the US economy expanded by 2.6 per cent, accelerating from 2.0 per cent in the preceding quarter.

Among EU member states, Denmark recorded the strongest quarterly growth, with GDP increasing by 1.9 per cent.

Estonia and Malta followed with growth of 1.1 per cent each, while Ireland experienced the sharpest contraction, with GDP falling by 12.1 per cent.

Lithuania saw output decline by 0.3 per cent, while Sweden and France recorded decreases of 0.2 per cent and 0.1 per cent respectively.

Eurostat said household final consumption expenditure contributed positively to GDP growth in both the euro area and the EU, adding 0.1 percentage points in each case.

Government consumption also provided a positive contribution of 0.1 percentage points in both areas.

By contrast, gross fixed capital formation exerted a negative impact, subtracting 0.1 percentage points from growth in both the euro area and the EU.

Changes in inventories reduced euro area growth by 0.1 percentage points, while their impact on the EU as a whole was negligible.

The contribution from exports less imports was negative, subtracting 0.3 percentage points in the euro area and 0.2 percentage points in the EU.

Eurostat also estimated that 221.2 million people were employed across the EU in the first quarter of 2026.

Of these, 176.3 million people were employed in the euro area, the figures showed.

Employment increased by 0.1 per cent in the euro area compared with the previous quarter, while employment across the EU remained unchanged.

In the fourth quarter of 2025, employment had increased by 0.2 per cent in both areas.

Compared with the same period a year earlier, employment rose by 0.5 per cent in both the euro area and the EU.

This represented a slowdown from growth of 0.7 per cent in the euro area and 0.6 per cent in the EU recorded in the previous quarter.

At the same time, hours worked declined by 0.2 per cent in both the euro area and the EU compared with the preceding quarter.

On an annual basis, hours worked increased by 0.4 per cent in both areas.

Eurostat said these figures provide a picture of labour input that is consistent with the output and income measures used in national accounts.

In terms of employment growth among member states, Lithuania posted the strongest increase, with the number of employed persons rising by 1.8 per cent.

Malta followed with growth of 1.0 per cent, while Estonia registered an increase of 0.9 per cent.

Romania recorded the largest decline in employment, at 1.0 per cent. Ireland saw employment decrease by 0.8 per cent, while Portugal posted a decline of 0.4 per cent.

Although growth in Cyprus moderated during the opening months of 2026, the country continued to demonstrate stronger economic performance than both the euro area and the EU, highlighting the relative resilience of the island’s economy against a backdrop of weakening conditions across much of Europe.