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Cyprus Employment Rises As Unemployment Continues To Decline

Employment Growth And Workforce Expansion

Total employment in Cyprus reached 531,062 people in the fourth quarter of 2025, representing 65.2% of the population, according to data from the Cyprus Statistical Service (Cystat). This compares with 518,053 people, or 64.3%, in the same period of 2024. The number of employed individuals rose to 509,773, lifting the employment rate to 62.6% from 61.4% a year earlier.

Declining Unemployment And Gender Breakdown

Unemployment continued to decline, with the number of unemployed falling to 21,289. The unemployment rate dropped to 4.0%, compared with 4.5% in the fourth quarter of 2024. Male unemployment stood at 3.8%, while female unemployment reached 4.2%. Employment rates rose to 67.6% for men and 57.9% for women, reflecting broad-based improvement across the labor market.

Improved Outcomes For The Core Working-Age Group

Among people aged 20 to 64, the employment rate increased to 81.7%, up from 80.2% a year earlier. Employment gains were also recorded among older workers, with the 55–64 age group rising from 69.9% to 71.7%. The data suggests continued expansion in workforce participation across multiple age groups.

Sectoral Distribution And Employment Patterns

Services remained the largest employer, accounting for 81.3% of total jobs, followed by industry at 16.5% and agriculture at 2.2%, broadly unchanged from the previous year. Part-time employment represented 8.6% of total jobs, or 43,703 positions, compared with 8.8% previously. Full-time employment accounted for 90.2%, totaling 460,003 positions. The share of temporary contracts increased to 14.8% from 13.6%.

Rising Youth Unemployment

Despite overall labor market improvement, youth unemployment increased. The unemployment rate among people aged 15–24 rose to 14.7%, compared with 9.6% a year earlier. At the same time, long-term unemployment declined to 18.3% from 25.4% in the fourth quarter of 2024. Most unemployed individuals, around 66.6%, had been seeking work for less than six months.

Comprehensive Quarterly Analysis

The Labour Force Survey is conducted quarterly by Cystat and covers approximately 3,800 households across urban and rural areas. The data provides a snapshot of labor market trends in Cyprus as employment growth continues alongside shifting dynamics in youth and temporary employment.

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

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.

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.

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