In Cyprus, the economic climate deteriorated in February 2026, with the Economic Sentiment Index (DIP) recording a drop of 1.3 points compared to January.
The decline in the index is mainly due to the decline in business sentiment in the services sector and, to a lesser extent, to the decline in consumer confidence. In services, firms made more unfavourable assessments of their recent performance, particularly in terms of financial situation and turnover. However, they appeared more optimistic about the turnover of the next quarter, with estimates more positive compared to the previous two months.
In contrast, business sentiment strengthened in retail, construction and manufacturing, driven by improved assessments of the current state of businesses and heightened expectations for next-quarter activity.
Consumer sentiment deteriorated, as estimates of the future financial situation of households declined and intentions for large purchases weakened. Nevertheless, assessments of the current financial situation of households remained very favourable.
At the same time, the Economic Uncertainty Index recorded an increase, due to an increase in consumer uncertainty and a strengthening of business uncertainty in all sectors, except construction. Despite the increase, the level of economic uncertainty in Cyprus remains relatively low, especially among consumers and businesses in the services and construction sectors.
