Cyprus Economic Growth Outlook: 3.5% Expansion in 2025 With Steady Development in 2026

by THEFUTURE.TEAM

November 3, 2025

New projections for the Cyprus economy indicate a growth rate of 3.5% in 2025, slightly down from 3.9% in 2024, with expectations of stabilization throughout 2026. These figures, revised upward by 0.3 and 0.2 percentage points respectively compared to the July outlook, reflect a marked improvement in both domestic and international economic conditions.

Positive Developments And Improved Outlook

Domestically, a marked easing of inflation, strengthened economic confidence, and increased new loans driven by lower interest rates are contributing robustly to economic dynamics. Internationally, reduced trade uncertainty and decreased market volatility in the third quarter of 2025 further bolster growth prospects compared to the previous quarter.

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Risks To Lower Growth

Despite these optimistic projections, significant downward risks persist. The external environment remains a concern as key trading partners may experience slower-than-expected growth amid subdued confidence indicators. Additionally, upward pressures on public spending, extreme weather events linked to climate change, and escalating geopolitical tensions could potentially impede economic momentum in Cyprus.

Inflation: Decline In 2025, Recovery In 2026

According to the Consumer Price Index, inflation is projected to decline to 0.3% in 2025, down from 1.8% in 2024, before rebounding to 2.0% in 2026. The downward revision for 2025, decreased by 0.7 percentage points compared to the July forecast, is attributed to lower inflation rates in the third quarter and a drop in international oil prices. In contrast, the upward revision for 2026 (+0.5 percentage points) is tied to the country’s strong economic performance during the initial three quarters of 2025, as reflected in quarterly and monthly data.

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Cyprus Summer Bookings Fall Over 30% As Hospitality Sector Seeks Support

by THEFUTURE.TEAM

May 1, 2026

Pre-Bookings Decline In Cyprus Tourism Sector

Cyprus tourism stakeholders reported lower pre-bookings for the summer season compared with last year. Industry representatives, including hotel associations and unions, raised the issue during a meeting with Marinos Mousiouttas, Minister of Labor, noting that cancellations have stabilised while forward bookings remain below previous levels.

External Pressures And Travel Patterns

Several factors are affecting travel demand. Higher fuel costs have contributed to increased airfare prices, influencing travellers’ choices and shifting some demand toward alternative transport such as cruises, trains, and private vehicles. At the same time, adjustments in airline schedules, including route reductions, are affecting connectivity and booking flows.

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Calls For Government Support

Against this backdrop, industry representatives requested an extension of wage subsidy schemes through April and May. They also pointed to the need for broader measures to support the sector, as early booking activity has slowed and booking patterns are shifting toward last-minute reservations. Current reservations are reported to be more than 30% lower than a year earlier, while average hotel occupancy is around 40%, compared with previous levels closer to 80%.

Coordinated Government Response And Future Prospects

Christos Angelidis, General Director of PASYXE, said Marinos Mousiouttas, Minister of Labor, acknowledged the situation and will consult with other ministers on possible coordinated measures. Angelidis added that extending wage subsidy schemes could support business continuity during the current period and help stabilise conditions in the sector.

At the same time, the government has introduced a strategic plan focused on how Cyprus is positioned internationally. The initiative, developed with Invest Cyprus, aims to align messaging across tourism and investment, with emphasis on consistency in external communication. Victor Papadopoulos, Director of the President’s Office, said the approach is intended to highlight key characteristics of the country in international markets.

Looking Ahead

Current booking data and occupancy levels indicate a slower start to the season, while demand patterns are shifting toward shorter booking windows. At the same time, discussions between industry representatives and government bodies point to potential measures aimed at supporting the sector as the season progresses.

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