Cyprus trade balance improves as euro area records €1.9bn deficit

The euro area recorded a trade deficit of €1.9 billion in January 2026, according to Eurostat, while Cyprus posted a significantly improved trade balance over the same period.

The euro area deficit widened from the €1.40 billion recorded in January 2025, reflecting changing trade dynamics across key sectors.

Euro area exports fell to €215.30 billion in January 2026, marking a decline of 7.6 per cent compared with €232.90 billion a year earlier.

Imports also declined to €217.20 billion, representing a drop of 7.3 per cent from €234.30 billion in January 2025.

The monthly balance shifted sharply from a surplus of €11.20 billion in December 2025 to a deficit, driven mainly by developments in the machinery and vehicles sector.

The surplus in machinery and vehicles dropped dramatically from €13.20 billion to €1.60 billion, highlighting the sector’s impact on overall trade performance.

Year-on-year, the deterioration was also linked to a decline in the chemicals sector, where the surplus fell from €24.60 billion to €16.70 billion.

At the same time, the energy deficit improved, narrowing from €26.20 billion in January 2025 to €19.20 billion in January 2026.

Across the European Union, a similar pattern emerged, with a trade deficit of €5.90 billion recorded in January 2026.

This marked a slight increase from a €5.40 billion deficit in January 2025, alongside a sharp reversal from a €12.30 billion surplus in December 2025.

EU exports dropped by 10.0 per cent to €189.20 billion, while imports declined by 9.5 per cent to €195.10 billion.

The machinery and vehicles sector again played a central role, with its surplus falling from €16.20 billion to €1.70 billion month-on-month.

Chemicals also recorded a decline, with the surplus decreasing from €23.00 billion to €15.40 billion year-on-year.

Meanwhile, the EU energy deficit narrowed from €29.30 billion to €21.50 billion, providing some offset to broader declines.

Despite the weaker start to 2026, both the euro area and EU recorded annual trade surpluses in 2025, although these were lower than in the previous year.

The euro area surplus stood at €149.90 billion in 2025, compared with €159.00 billion in 2024, with exports rising by 2.4 per cent and imports by 2.8 per cent.

EU trade followed a similar trend, with a surplus of €130.00 billion in 2025, down from €140.20 billion in 2024, while exports increased by 1.9 per cent and imports by 2.4 per cent.

Intra-euro area trade reached €2.67 trillion in 2025, up 2.0 per cent, while intra-EU trade rose by 2.7 per cent to €4.14 trillion.

In contrast, Cyprus recorded a sharp improvement in its trade balance in January 2026, according to data released by the state statistical service earlier this month.

The country’s trade deficit narrowed to €476.60 million, compared with €707.50 million in January 2025.

Total imports fell to €994.10 million, marking a decrease of 13.6 per cent from €1.15 billion a year earlier.

Imports from EU member states declined to €554.30 million, compared with €583.00 million in January 2025.

Imports from third countries dropped more sharply to €439.80 million, down from €568.20 million in the same month of the previous year.

The figures include the transfer of economic ownership of vessels valued at €79.00 million, slightly lower than €79.90 million recorded in January 2025.

At the same time, exports rose significantly to €517.50 million, representing a 16.6 per cent increase from €443.70 million in January 2025.

Exports to EU countries increased to €97.20 million, compared with €84.40 million in the previous year.

Exports to third countries reached €420.30 million, up from €359.30 million in January 2025.

Export data also reflected a sharp rise in vessel transfers, valued at €193.50 million compared with just €11.30 million a year earlier.

Separate data for December 2025 showed a decline in imports alongside growth in several export categories, indicating improving trade momentum.

Imports fell to €1.25 billion in December 2025, compared with €1.39 billion in December 2024, a decrease of 9.9 per cent.

Domestic exports rose to €274.20 million, up from €249.70 million, representing an increase of 9.8 per cent.

Industrial exports reached €262.50 million, compared with €239.00 million in December 2024.

Agricultural exports also increased to €10.90 million, up from €9.20 million.

Exports of foreign products surged to €224.20 million, marking a sharp increase of 77.7 per cent from €126.20 million.

For the full year 2025, mineral fuels and oils were Cyprus’ largest export category, with a value of €2.33 billion.

Other key exports included halloumi cheese valued at €356.90 million and pharmaceutical products at €356.20 million, underlining the country’s export strengths.