Overview Of Economic Resilience
Cyprus’ economy sustained a strong growth trajectory in 2025, with Gross Domestic Product (GDP) expanding by 3.8% on an annual basis and by 4.5% in the fourth quarter. Updated official data released on Monday confirm continued economic momentum, supported by key domestic sectors.
Adjustment Of National Accounts
Revisions to annual and quarterly National Accounts were introduced following updates in public finances, Balance of Payments data, and the integration of the 2022 Supply and Use Tables. While these methodological adjustments refined the data, they did not alter the broader growth narrative, which remains positive.
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Robust Annual And Quarterly Performance
In real terms, GDP increased by 3.8% in 2025. At current prices, growth reached 4.9%, with total output amounting to €36.48 billion. This performance was underpinned by strong activity in information and communications, alongside solid contributions from tourism, retail trade, and construction. These sectors continue to play a central role in supporting overall economic expansion.
Sector-Specific Drivers
During the fourth quarter of 2025, GDP grew by 4.5% compared to the same period in 2024, while quarter-on-quarter growth reached 1.4%. Construction recorded the highest increase at 9.4%, reflecting ongoing development activity. Information and communications expanded by 8%, while the combined retail and tourism sectors grew by 7.2%, highlighting their continued importance for economic momentum.
Shifts In Consumption And Investment
On the expenditure side, private consumption rose by 3.4% during the fourth quarter, while public consumption increased by 4.4%, supporting overall demand. In contrast, gross fixed capital formation declined by 15.2%, primarily due to fluctuations in high-value investments, including ships and aircraft, which tend to introduce volatility into investment data.
External Sector Contributions
The external sector also contributed positively to GDP composition. Exports of goods and services increased by 2.9%, while imports declined by 4.2%. This shift reflects improved external balances and continued competitiveness in export-oriented sectors.
Outlook
Overall, the data point to a balanced and steadily expanding economy, supported by domestic demand, sectoral performance, and favorable external dynamics. Future growth will depend on investment stabilization and broader international economic conditions.
