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Cyprus’ Economic Growth: A 2025 Projection by the European Commission

by News Editor

May 19, 2025

The European Commission has forecasted that Cyprus will see a 3% economic growth in 2025, slightly decreasing to 2.5% in 2026. This upward trend is primarily driven by resilient domestic demand, a robust services export sector, and a strong labor market.

With a 3.4% real GDP growth recorded in 2024, Cyprus has demonstrated robust private consumption, which rose by 3.8%. Investment excluding ship registrations also increased, despite a construction strike at the end of the year.

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Net exports turned positive, bolstered by tourism, ICT, and sea transport. Private consumption is expected to remain a key driver as wages rise and inflation falls, enhancing household purchasing power.

Growth Drivers and Challenges

The projection is supported by ongoing investment and structural transformation within the Cypriot economy, attracting significant investment into emerging sectors like ICT.

However, increased foreign firm activity may lead to more profit repatriation, thereby limiting gains from improved trade balances. The current account deficit is expected to shrink to 5.9% by 2026.

Potential risks include global trade disruptions, particularly impacting Cyprus’s sea transport sector. Nonetheless, Cyprus’s limited direct trade with the US minimizes its exposure to US tariffs.

Recent interest rate cuts have also stimulated loan demand, contributing to Cyprus’s financial momentum.

Favorable Fiscal Outlook

The outlook for Cyprus’ fiscal health remains positive, with a strong budget surplus and a notable decrease in the debt-to-GDP ratio, projected to be 58% in 2025.

Spending will focus on energy projects such as the LNG terminal and social schemes, with revenues anticipated to outpace expenditures due to ongoing economic strength.

Despite these commitments, Cyprus continues to attract transformational ventures, enhancing its economic landscape.

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Cyprus Emerges As A Leading Household Consumer In The European Union

by THEFUTURE.TEAM

June 30, 2025

Overview Of Eurostat Findings

A recent Eurostat survey, which adjusts real consumption per capita using purchasing power standards (PPS), has positioned Cyprus among the highest household consumers in the European Union. In 2024, Cyprus recorded a per capita expenditure of 21,879 PPS, a figure that underscores the country’s robust material well-being relative to other member states.

Comparative Consumption Analysis

Luxembourg claimed the top spot with an impressive 28,731 PPS per inhabitant. Trailing closely were Ireland (23,534 PPS), Belgium (23,437 PPS), Germany (23,333 PPS), Austria (23,094 PPS), the Netherlands (22,805 PPS), Denmark (22,078 PPS), and Italy (21,986 PPS), with Cyprus rounding out this elite group at 21,879 PPS. These figures not only highlight the high expenditure across these nations but also reflect differences in purchasing power and living standards across the region.

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Contrasting Trends In Household Spending

The survey also shed light on countries with lower household spending levels. Hungary and Bulgaria reported the smallest average expenditures, at 14,621 PPS and 15,025 PPS respectively. Meanwhile, Greece and Portugal recorded 18,752 PPS and 19,328 PPS, respectively. Noteworthy figures from France (20,462 PPS), Finland (20,158 PPS), Lithuania (19,261 PPS), Malta (19,622 PPS), Slovenia (18,269 PPS), Slovakia (17,233 PPS), Latvia (16,461 PPS), Estonia (16,209 PPS), and the Czech Republic (16,757 PPS) further illustrate the disparate economic landscapes within the EU. Spain’s figure, however, was an outlier at 10,899 PPS, suggesting the need for further data clarification.

Growth Trends And Economic Implications

Eurostat’s longitudinal analysis from 2019 to 2024 revealed that Croatia, Bulgaria, and Romania experienced the fastest annual increases in real consumer spending, each growing by at least 3.8%. In contrast, five member states, with the Czech Republic experiencing the largest drop at an average annual decline of 1.3%, indicate a varied economic recovery narrative across the continent.

This comprehensive survey not only provides valuable insights into current household consumption patterns but also offers a robust framework for policymakers and business leaders to understand economic shifts across the EU. Such data is integral for strategic decision-making in markets that are increasingly defined by evolving consumer behavior and regional economic resilience.