AGP Executive Report

Energy & Security: Iran is reportedly weighing strikes on U.S. military assets in southeastern Europe, with Bulgaria and Cyprus named, while planners also consider attacks on subsea fiber-optic cables near the Strait of Hormuz—raising fresh NATO and market jitters. Labour & Hospitality: Cyprus Labour Minister Marinos Mousiouttas says the ministry will inspect claims that hotels are using temporary agency workers to bypass collective protections, warning against “two-speed employees.” Water & Agriculture: After heavy rain, reservoirs are back at about 40% capacity, but potato growers still warn of water shortages ahead of winter planting and are pushing for clearer allocations. Climate Policy: A Cyprus net-zero roadmap is being updated after a McKinsey-backed study mapped a €40bn cost to 2050, with the February law’s tighter 2040 target likely to raise the bill. Aviation & Tourism: Cyprus Airways adds year-round direct Larnaca–Munich and Larnaca–Rome, plus extra Heraklion frequency, expanding its network to 15 destinations. Food Trade: Eurostat shows Cyprus imported about 3.40m kg of ice cream/edible ice in 2025, mostly from other EU states. Retail & Consumer Rules: Lidl launches a PAW Patrol-branded campaign on selected own-brand products in Cyprus and 29 countries, tied to WHO-based nutritional criteria.

Inflation Pressure: Cyprus hit 4.4% annual inflation in July, putting it among the EU’s highest rates (joint third with Bulgaria), well above the euro area’s 2.9% as energy and services keep costs elevated. Construction Costs: Construction material prices rose again in July, up 3.33% year-on-year, with the biggest annual jumps in metallic products, aluminium/metal goods, and plastics/chemicals. Agriculture & Water: Potato farmers warn persistent water shortages could disrupt the winter planting season, with agricultural groups urging more reservoir and borehole supply despite some August rains. Livestock Recovery: The agriculture minister says most foot-and-mouth disease compensation has already been paid, while authorities move toward rebuilding the sector with stronger biosecurity. Energy Infrastructure: The Great Sea Interconnector is pushing ahead after a major financing step, with EU support framed as a “shield” against Turkish opposition and new seabed survey steps planned via navtex notices. Blue Economy Push: Cyprus and Croatia will meet in Limassol on Sept 25 for a blue economy business and innovation forum under Horizon Europe and maritime digitalisation projects. Geopolitical Risk: Reports say Iran is weighing retaliation scenarios that could involve British bases in Cyprus if the US escalates, keeping the island in the wider security spotlight. Local Governance: Nicosia’s EOA is still waiting for about €2m in state funding for dangerous buildings, as procedures from the Interior Ministry remain unresolved. Maritime/Tech: Cyprus’ gaming sector keeps climbing, with a new CYGMA report estimating €3.2bn revenue in 2025 from 400+ studios and publishers.

Construction & Safety Funding: Nicosia’s EOA is still waiting for about €2m in state money to tackle dangerous buildings, after Interior Ministry procedures for applying for the funds remain unclear following a post-reform handover from the Border Areas Revitalisation Fund. Smart Mobility: Cyprus’ transport ministry has launched a tender worth an estimated €41.9m for “smart” vehicle-actuated traffic lights in Nicosia and Limassol, with work due to start in early October and a Sept. 18 deadline for bids. Tourism Labour Pressure: Hotel unions SEK and PEO warn of a growing “two-speed” workforce as hotels rely on labour agencies supplying third-country workers, calling it a “slave market” and threatening further action in September. Energy Infrastructure: IPTO says the Cyprus–Israel Great Sea Interconnector’s second section is economically viable under all scenarios after submitting an investment application, while a navtex is expected “as soon as possible” for seabed surveys. Digital Payments Awareness: The Central Bank of Cyprus reports low public readiness for the digital euro, with 61% saying they know nothing about it ahead of a targeted 2029 launch. Gaming Industry Growth: CYGMA says Cyprus’ video game sector generated over €3.2bn in 2025 and is now preparing its first official national delegation for Gamescom.

Maritime & Ports: DP World Limassol wrapped up its annual two-month internship programme, placing four university students into real port operations and building a local talent pipeline for Cyprus’ maritime sector. Crypto Regulation: CySEC reminded investors to verify which legal entity is authorised under MiCA after July 1, 2026, as unauthorised providers withdrew and scammers exploited brand confusion. Gaming Industry: Cyprus broke into Europe’s top ten video game markets by revenue, with CYGMA estimating €3.2bn from 415 studios in 2025 and highlighting how older titles still drive most income. Energy & Grid: The energy minister pushed back on claims solar is “loss-making,” citing curtailment and grid constraints (including wasted solar output) rather than system economics as the real issue. Renewables & Policy: Cyprus’ solar curtailments continue, with the minister stressing cuts aim at grid stability and can start with larger systems before smaller rooftop sites. Shipping/Finance Watch: CySEC also warned against nine unauthorised investment entities after spotting websites not linked to licensed firms. Local Business & Consumer Tech: didlogic joined Vapi’s Partner Directory as an AI voice telephony infrastructure provider, offering SIP connectivity and carrier routing for production voice agents. Transport & Travel: Jet2 added a 72-hour app feature for live flight status and in-resort customer helper details, extending its push for smoother travel logistics. Recreation & Enforcement: Cyprus tightened scrutiny after a Pernera jet ski accident, with renewed questions about how license-free rentals work in practice. Industry Culture: Panasonic expanded its 2026 U.S. TV lineup with OLED, Mini-LED and QLED series, targeting a wider range of screen sizes and gaming needs. Diplomacy (Regional): Turkey’s Libya pivot drew attention as Ankara gained access to both sides of the divided country, with implications for Eastern Mediterranean energy and maritime disputes.

Energy & Grid Policy: Cyprus’ energy minister pushes back on claims that solar is “loss-making,” saying curtailments are about grid stability and that 2025 saw 300GWh wasted plus 162GWh curtailed in early 2026 due to constraints and limited storage. Maritime & Safety Regulation: After a jet ski crash off Protaras, Cyprus’ 2026 recreational navigation law is set to raise fines for unlicensed operation from €85.43 to up to €1,500, while investigations focus on licensing rules for learner operators. Trade & Export Support: Cyprus opens a €1.7m de minimis fund for exporters to showcase industrial and agricultural products at major 2027 trade fairs, with food and drink leading the programme. Finance & Fintech: Wiki Finance Expo Cyprus 2026 is set for Limassol on 6 Nov, positioning Cyprus as a forex, payments and regulatory-tech hub under CySEC’s EU passporting. Banking Updates: Housing Finance Bank appoints Robert Kusiima Mugabe as COO, while Eurobank highlights Euromoney awards and continued digital momentum. Environment & Fisheries: Cyprus steps up invasive lionfish control as warming seas and the Suez Canal accelerate Mediterranean species turnover. Business Climate: Eurostat reports Cyprus bankruptcy declarations down 41.7% in Q2 2026, though small numbers can swing quarterly figures. Crypto Leadership: Revolut’s Cyprus crypto arm names Georgios Vasiliou CEO, under its CySEC MiCA authorization.

Export Push: Cyprus’ Energy Ministry opened a €1.7m de minimis fund to help industrial and agricultural producers (and related services) secure a national pavilion at major 2027 trade fairs, starting with Fruit Logistica and ProWein, then Gulfood and Anuga. Shipping & Logistics: JPB Cyprus Holding agreed to acquire 100% of Genesis Logistics, pending competition clearance, while Cyprus renewed efforts to attract shipowners by highlighting tax stability, EU status and inspection performance as the registry grows. Finance & Fintech: Revolut appointed Georgios Vasiliou to lead its CySEC-authorised Cyprus crypto arm, and Eurobank was named top in Cyprus for individuals and business clients by Euromoney. Banking Operations: Housing Finance Bank named Robert M. Kusiima Mugabe as COO as it drives digital transformation. Consumer Rights: EU “right to repair” rules now apply in Cyprus, pushing manufacturers to offer timely, reasonably priced repairs for repairable products. Agriculture Strategy: The €109.3m plan to transform Cyprus’ primary sector is progressing through 2029, targeting higher GDP contribution and new jobs. Safety & Regulation: A jet ski collision in Famagusta is under investigation, with focus on licensing rules for under-18 operators. Business Climate: Cyprus saw EU’s second-steepest drop in bankruptcy declarations in Q2 2026, down 41.7% quarter-on-quarter.

Agriculture Strategy: Cyprus is pushing ahead with a €109.3m “Strategy for the Development of the Primary Sector” through 2029, aiming to lift the sector’s GDP contribution (currently 1.8%) and backed by a study projecting €138.6m output, €70.8m GDP impact and about 1,370 new jobs. Banking Spotlight: With banks’ profits strong since 2022, Cyprus now faces renewed political pressure as Parliament returns in September, with talk of a possible windfall tax and tougher banking-law changes amid a more fragmented post-election landscape. Energy & Infrastructure: The Great Sea Interconnector debate continues as experts question viability, governance and cost assumptions after Meridiam’s stake move, while Cyprus-Israel power-link filings and support from lawmakers keep momentum. Digital Connectivity: Cyta and partners are advancing the Ugarit 2 undersea cable to connect Cyprus and Syria by early 2028, replacing the older, lower-capacity link. Security & Defence: Cyprus is reportedly exploring becoming the first foreign operator of Israel’s Merkava tanks after rejecting Leopard 1A5s, potentially reshaping the Eastern Mediterranean armored balance. Regional Geopolitics: The “Mecca pact” is being framed as an “Islamic NATO” style collective defence step, with implications reaching toward the Eastern Mediterranean. Local Economy & Jobs: Cyprus’ utility battery has entered commercial operation, adding another industrial capability as the island looks to scale energy and tech services.

Cyprus–Syria Connectivity: Cyta, UNIFI and Syria’s telecom operator are pushing the new Ugarit 2 undersea cable, linking Pentaskhinos (Cyprus) to Tartus (Syria) and aiming for service by early 2028, replacing the older 1995 line with far higher capacity. Energy Infrastructure: The Great Sea Interconnector faces fresh scrutiny after an expert questioned viability, governance and cost assumptions following Meridiam’s 66% stake and pending feasibility work. Property & Housing Signals: Cyprus’ Q2 GDP growth hit 3.3%, but the property market cooled sharply in Q2, with new-build apartment/house sales down 42.2% by volume and 46.6% by value, suggesting demand shifted toward lower and mid-price homes. Marine Environment: Cyprus is also tackling invasive lionfish as Mediterranean ecosystems rapidly change, with local efforts turning the species into food while monitoring spread. Regional Trade & Ports: KPA tightened security at the Port of Mombasa under the ISPS Code, stepping up drills and training as maritime threats evolve. Tourism Pressure: Reports say hotel prices on Turkey’s coast are easing amid Iran-war driven demand shifts, with Cyprus also seeing price declines. Regional Security: A new Saudi–Türkiye–Pakistan defence agreement was signed in Mecca, raising questions about how deterrence and alliances may reshape the Eastern Mediterranean.

Energy & Infrastructure: Cyprus-Israel power link projects move into the “money stage,” with new investment filings and proposals from grid operators pushing the interconnector forward. Housing & Construction: Cyprus’ property market shows a demand shift rather than a full freeze, with new-build sales down sharply in Q2 but more activity clustering under €300,000 and stronger pockets like Nicosia. Economy: Cyprus GDP growth accelerates to 3.3% in Q2, outpacing the euro area and EU averages. Environment & Marine Industry: Cyprus steps up invasive lionfish harvesting as Mediterranean ecosystems rapidly change, while local pressure grows over sewage discharges affecting coastal water quality. Regional Trade & Shipping: Iran and Oman report progress on a Strait of Hormuz shipping traffic map, aiming to manage one of the world’s key energy routes. Tourism & Consumer Impact: Turkey’s coastal hotel prices fall amid weaker demand linked to the Iran war, with Cyprus also seeing price declines. Skills & Jobs: AI data center expansion is expected to create six-figure roles, intensifying competition for construction labour that also affects housing timelines.

Cyprus Economy Watch: Cyprus’ GDP grew 3.3% year-on-year in Q2 2026, outpacing the eurozone and EU, with growth driven by wholesale/retail, vehicle repairs, ICT, finance/insurance and construction. Energy Reliability: The grid operator says no power cuts are expected as demand eases and capacity remains sufficient, after July’s supply stress tied to high demand and unit failures. Property Market Shift: New-home sales in Cyprus fell sharply in Q2, with new-build apartment/house transactions down 42.2% and value down 46.6%, though demand appears to have shifted toward lower- and mid-priced homes. Marine Environment Pressure: Residents in Limassol and Moni report worsening seawater pollution, with Moni sewage overflow into the sea sparking community action and renewed concern over treatment capacity. Regional Power Projects: Cyprus’ electricity links and interconnector planning continue to move forward amid broader Greece–Cyprus–Israel cooperation and regional security debate. Security & Shipping Risks: Ukraine’s intelligence lists 26 Russian-linked vessels moving oil, LNG and stolen grain, noting 18 are not currently sanctioned by partner countries.

Cyprus Energy & Infrastructure: IPTO submitted the investment approval request for the Great Sea Interconnector, the Cyprus–Israel power link, after cost-benefit and cost-allocation steps—pushing the project into the regulatory evaluation phase. Cyprus Economy: Cystat prelim data shows Cyprus GDP up 3.3% year-on-year in Q2, with growth led by wholesale/retail, vehicle repairs, ICT, finance/insurance and construction. Energy Security: Cyprus’ energy minister says natural gas could reach European consumers by the first half of 2028 (around March), as the EU seeks new supply sources. AI for Tourism: Cyprus unveiled its “Smart Tourism 2032” AI strategy, aiming to embed AI across tourism services with a focus on small and medium businesses. Local Development: Paralimni secured planning permission for a central-area redevelopment—new pavements, trees and parking to boost commercial activity. Power Reliability: The grid operator says no power cuts are expected as demand eases, with reserves currently covering load. Fuel Prices Scrutiny: Consumers association questions whether Middle East-driven energy costs fully explain recent fuel price rises. Regional Politics: Turkey’s FM accuses Greece, Cyprus and Israel of forming a security alliance aimed at containing Ankara, amid expanding trilateral cooperation. Shipping & Trade: Eastern Mediterranean shipping leaders call for stronger RISQ 3.2 readiness as regional logistics face operational and compliance pressure. Environment & Land Use: Questions remain over an order not to mine the Kyrenia coast before the 1974 invasion, while a proposed Junius solar project faces an environmental impact statement requirement.

Smart Tourism Push: Cyprus unveiled “Smart Tourism 2032,” an AI strategy built around smart infrastructure, destination design and an “empowered digital tourist,” with special focus on small and medium tourism businesses. AI Skills Gap: A separate look at Cyprus’ AI and fintech ambitions flags a workforce challenge: strong graduate numbers, but STEM enrolment (14.9%) lags the EU, while demand is expected to skew heavily toward STEM roles. Energy Grid Milestone: The Great Sea Interconnector’s Cyprus-Israel section moved into the “money stage” as regulators received an investment request to set how cross-border costs are allocated. EU Circularity Rules: New EU vehicle rules entered into force, tightening used-car export controls and pushing recycled-plastic targets, with major provisions starting from 1 Sept 2028. Fuel Price Scrutiny: Cyprus’ consumers association is questioning whether Middle East-driven energy costs fully explain recent fuel price rises. Wildfire Risk: Forestry Department urged strict fire safety ahead of Aug. 15; a blaze near Marathounta in Paphos destroyed six hectares including almond trees. Used-Car Recycling Impact: EU recycling rules are set to hit Cyprus’ booming used-car market as compliance ramps up.

Energy Infrastructure: IPTO has submitted an investment request to Cyprus and Israel regulators for the Cyprus–Israel section of the Great Sea Interconnector, moving the project into the cost-allocation and tariff-recovery stage. Regional Power & Security: US lawmakers are urging the Trump administration to prioritise the Greece–Cyprus–Israel power link as part of a wider India–Middle East–Europe corridor. Utilities & Grid Resilience: Cyprus’ first utility battery project has entered commercial operation, adding grid flexibility. Shipping & Compliance: Eastern Mediterranean shipping leaders called for stronger operational readiness ahead of RightShip’s RISQ 3.2 inspection framework, stressing crew competence and consistent onboard procedures. Industrial Performance: Eurostat data shows Cyprus industrial output fell 1.3% in June 2026, with annual output down 0.9%. Environment & Governance: Environmental groups criticised the termination of Antonia Theodosiou as environment commissioner, warning of a loss of expertise. Consumer Watch: Cyprus consumers association questions whether fuel price rises are justified, citing sharp heating oil increases ahead of winter. Digital Agenda Cyprus Summit: Digital Agenda Cyprus Summit 2026 announced C. L. Max Nikias as a major speaker, focusing on AI’s impact on technology, work and geopolitics.

Energy Prices Under Scrutiny: Cyprus consumers association says heating oil and fuel rises since March look hard to justify, citing a jump from €0.950/l to €1.438/l for heating oil and calling on authorities to show the increases are properly monitored. Industry Pulse: Eurostat data shows Cyprus industrial output fell 1.3% in June 2026, reversing earlier year-on-year growth, while the euro area stayed broadly stable. Grid Upgrade for Renewables: Petrolina Electric brought a 5MWh utility battery into commercial operation at Pavlina Memorial Energy Park alongside 1.8MW solar, aiming to cut curtailment as midday renewable output outpaces storage and grid flexibility. Electricity Interconnector Momentum: The Great Sea Interconnector project advanced after Admie submitted an investment request for the Cyprus–Israel link under EU TEN-E rules, while US lawmakers urged Washington to prioritize the Greece–Cyprus–Israel power link as part of IMEC. Banking & Finance Watch: Central Bank of Cyprus extended the deadline for tenders to mint, package and deliver euro silver and gold collector coins to September 25, 2026. Energy Storage Pipeline: A wider 231MW/570MWh standalone storage pipeline is progressing through preliminary connection arrangements. Tourism Signals: Paphos hoteliers expect August occupancy at 85–90% but warn of weaker autumn bookings and falling room prices.

Energy Infrastructure Push: US lawmakers urge support for the Great Sea Interconnector, a planned undersea power link connecting Israel–Cyprus–Greece, framed as a strategic energy and connectivity bridge for the Eastern Mediterranean. Construction & Housing Momentum: Cyprus building permits surged in early 2026, with Oev and Keve pointing to strong housing demand but warning labour and red tape could slow delivery. Logistics Growth: Cyprus road freight activity rose in Q1 2026, with both domestic and cross-border movements increasing, reinforcing the island’s reliance on road links alongside shipping and air. Tourism Watch: Famagusta hoteliers expect August occupancy around 80–85%, driven by UK, Israel and parts of Central Europe, while last-minute booking patterns keep forecasting tricky. Regulatory Scrutiny: Questions are raised over whether a journalist’s crowdfunding for legal expenses fits Cyprus fundraising law, with authorities said to be reviewing the matter. Energy Storage Milestone: Cyprus’ first utility battery project is reported as going online, marking a new step for grid flexibility. Marine Ecology Risk: A Reuters report says the Mediterranean has surpassed 1,000 non-indigenous species, with Cyprus fisheries among those feeling the impact as invasions reshape ecosystems.

Cyprus Construction & Housing: Cyprus building permits jumped 10.7% in April to 639 permits worth €413m, with 1,728 residential units expected from the approvals, keeping the housing boom momentum. Energy Infrastructure: US lawmakers are pushing the Trump administration to prioritise the Great Sea Interconnector, linking the electricity grids of Greece, Cyprus and Israel as a key piece of the India-Middle East-Europe corridor. Tourism Pressure & Demand Shifts: Paphos hoteliers report August occupancy of 85–90% despite weaker room prices and softer autumn bookings, with last-minute decisions driven by higher living costs. Fintech & Jobs: Cyprus remains the top global hiring hub for online trading firms (226 vacancies as of mid-July), even as recruitment cools, with AI increasingly showing up in job descriptions. AI Retail Expansion: Powersoft365, a Cyprus-based tech firm, is taking eight live AI agents for apparel and retail to Indonesia’s Retail Summit & Expo in Jakarta. Animal Welfare Regulation Prep: A report on Cyprus pet hotels is due in early September, aiming to map licensed vs unlicensed dog boarding facilities before any regulatory changes. Fire Safety Upgrade: Cyprus’ forestry department completed training for 17 new fire engines, boosting readiness for wildfire response.