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Cyprus Economy Flourishes As Labor Market Redundancies Plummet

by THEFUTURE.TEAM

February 4, 2026

Robust Economic Growth And Shrinking Redundancies

The current upward trends in the Cypriot economy are manifesting strongly in the labor market. In 2025, redundancies were reduced by nearly 50% compared to 2024, a clear indicator of both robust economic performance and efficient workforce management. The reduction in redundant employment figures is complemented by a significant 54.7% decrease in the redundancy compensation disbursed by the state in the same period, underscoring notable fiscal prudence.

Employment Rates And Fiscal Health

Labor market data show near-full employment, with the unemployment rate at 4.3% in December 2025. The decline in redundancies, combined with wage growth, has supported consumer spending and contributed to higher government revenues. Analysts link these developments to ongoing economic adjustments and structural reforms.

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Comparative Analysis Of Redundancy Compensation

According to figures from the Ministry of Labor, 1,386 redundancy applications were approved in 2025 at a total cost of €15.7 million. This level is close to 2002, when the state paid €15.2 million. In previous years the figures were higher. In 2024, 2,509 employees received compensation totaling €28.7 million, while in 2023 the amount reached €27.8 million for 2,398 employees. Between 2020 and 2025, around 13,000 workers received redundancy payments amounting to €143 million in total.

Historical Perspective During Economic Downturns

During the economic crisis of 2013 and 2014, redundancy payouts reached their highest levels at €88.5 million and €99.5 million respectively, as business closures led to widespread job losses. The comparison highlights the shift from crisis conditions to the current period of relative stability.

Methodology Behind Redundancy Payments

The maximum individual redundancy payment in 2025 reached €64,489, up from €60,874 in 2024. Earlier years recorded lower maximum amounts, reflecting gradual wage increases. Under current legislation, the maximum entitlement is calculated using up to 75.5 weeks of compensation based on capped weekly earnings. Social Security rules also require at least 104 consecutive weeks of employment with the same employer, with compensation set at three weeks of pay for each full year of continuous service.

Conclusion

Recent data show a steady improvement in Cyprus’ labor market, with fewer redundancies, gradual wage growth and reduced state spending on compensation. If these trends continue, they are expected to support both business stability and household income levels.

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Bank of Cyprus Upgrade Signals Fresh Optimism For Greek And Cypriot Banks

by THEFUTURE.TEAM

June 26, 2026

Regional Banks Enter A More Favorable Cycle

Bank of Cyprus and Eurobank are well positioned to benefit from a renewed re-rating of Greek and Cypriot bank stocks, according to Cyprus-based investment firm Roemer Capital, which upgraded Bank of Cyprus to a buy rating and reaffirmed its positive view on Eurobank.

The firm cited easing geopolitical tensions, resilient economic growth in Greece and Cyprus, lower funding costs and Greece’s expected transition to developed-market status as the main factors supporting the sector.

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Roemer Capital also lowered its cost of equity assumptions, updated its forecasts following first-quarter 2026 results and extended its valuation horizon to the end of 2027, raising target prices across its banking coverage.

Bank Of Cyprus Gets The Largest Upgrade

Bank of Cyprus received the biggest revision, with Roemer Capital upgrading the stock from hold to buy and setting a target price of €11.10, implying potential total upside of 27%.

The firm highlighted the bank’s strong capital generation, profitability and projected 100% dividend payout, describing it as the strongest capital-return story among the banks under coverage. Roemer Capital maintained its buy rating on Eurobank, assigning a target price of €4.90 and forecasting potential upside of 28%. The report said the bank is well placed to benefit from loan growth, improving operating performance and merger-and-acquisition synergies.

National Bank of Greece and Piraeus Bank also retained buy ratings, with expected returns ranging from 25% to 36%. Optima Bank was upgraded to buy, while Alpha Bank remained at hold on valuation grounds.

Why Growth Still Sets The Region Apart

According to Roemer Capital, Greek and Cypriot banks continue to benefit from stronger economic fundamentals than many western European peers. The report pointed to faster economic growth, healthier balance sheets, low levels of non-performing exposures, capital ratios approaching 20% and strong customer deposit bases.

Analysts expect performing loans across the sector to grow at a compound annual rate of 6% to 8% through 2028, supported by private investment, digitalisation, green manufacturing, supply-chain expansion and a gradual recovery in household lending.

The report also said the conclusion of lending under the EU Recovery and Resilience Facility is unlikely to materially affect credit growth, as banks have already shifted back towards traditional commercial lending. Roemer Capital expects Euribor to remain between 2.2% and 2.5%, a level it believes should support both lending activity and net interest margins.

Geopolitics, Valuation And Market Structure Support The Case

The report said improving geopolitical conditions have strengthened the investment outlook, noting that Brent crude prices have largely returned to pre-war levels while Greek government bond yields have stabilised at around 3.5%. Although geopolitical risks remain, Roemer Capital believes the likelihood of a major inflationary shock or significant pressure on bank profitability has eased.

Another important catalyst identified by the firm is Greece’s expected promotion to developed-market status by FTSE Russell, STOXX and MSCI over the coming months.

According to the report, the reclassification should improve liquidity and attract a broader base of international investors. Roemer Capital also said Euronext’s acquisition of the Athens Exchange is expected to strengthen market infrastructure and increase international visibility, particularly for Bank of Cyprus and Optima Bank.

The firm noted that Bank of Cyprus has already benefited from its Athens listing, with average daily trading value increasing from less than €400,000 before its September 2024 move to nearly €6 million afterwards.

Economic Momentum Remains A Core Tailwind

Roemer Capital said both Greece and Cyprus have moved beyond post-crisis recovery and are now supported by private-sector-led growth. For Cyprus, the report highlighted recent tax reform and efforts to simplify the legal and regulatory framework, while also noting that limited foreign banking competition continues to support domestic lenders.

Overall, Roemer Capital expects Greek and Cypriot banks to remain well-positioned for profitable loan growth over the coming years.