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Cyprus Economy Maintains Resilience With Robust Growth In 2025

by THEFUTURE.TEAM

April 22, 2026

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.

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Cyprus Remains Among EU’s Lowest Renewable Electricity Producers

Cyprus remained among the European Union’s weakest performers in renewable energy adoption in 2025, with renewables accounting for 27.5% of gross electricity consumption, according to new data published by Eurostat.

Across the EU, renewable sources supplied 49.9% of gross electricity consumption last year, bringing the bloc close to generating half of its electricity from renewable energy.

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Cyprus Remains Among The EU’s Lowest Performers

Cyprus ranked among the EU countries with the lowest share of renewable electricity, ahead of only Malta at 11.2%, the Czech Republic at 19.2%, Luxembourg at 23.3% and Slovakia at 24.1%.

Across the country’s broader energy system, renewables accounted for 21.5% of gross final energy consumption in 2025.

EU Renewable Electricity Continues To Grow

Renewables supplied 49.9% of gross electricity consumption across the EU in 2025, up from 47.5% a year earlier. Since Eurostat began collecting comparable data in 2004, the share has risen from 15.9%.

Austria recorded the highest share at 90.8%, followed by Sweden at 89.2%. Denmark generated 77.7% of its electricity from renewable sources, followed by Portugal at 65.6%, Greece at 60.9% and Spain at 60.7%.

Overall Energy Transition Still Has Work Ahead

Renewables accounted for 26.2% of the EU’s gross final energy consumption in 2025, up from 25.2% in 2024 and 9.6% in 2004.

Despite the increase, the bloc remains below its legally binding target of 42.5% by 2030. According to Eurostat, achieving that goal will require an average annual increase of 3.3 percentage points between 2026 and 2030.

Sweden recorded the highest overall renewable energy share at 65.4%, followed by Finland at 53% and Denmark at 48.2%. Belgium recorded the lowest share at 14.9%, followed by Slovakia at 16.3% and Ireland at 17.2%.

Heating And Cooling Also Show Steady Progress

Renewable energy accounted for 27.4% of heating and cooling across the EU in 2025, the highest level since comparable records began in 2004. The share increased by 0.7 percentage points from 2024, slightly below the long-term annual average increase of 0.75 percentage points.