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Cyprus’ Net FDI Position Deteriorates in 2024 Amid Rising Outflows

by THEFUTURE.TEAM

January 19, 2026

Net FDI Position Further Declines

In 2024, Cyprus maintained its negative net position in Foreign Direct Investment (FDI), with the decline in outward investments outpacing inward flows. The latest report by the Central Bank of Cyprus confirms a deepening negative balance, with the net FDI position deteriorating from -€34.8567 billion in 2023 to -€41.8640 billion in 2024.

Reduction In Stocks Of Inward And Outward Investments

The stock of outward FDI declined to €331.7521 billion in 2024 from €366.0002 billion in 2023. This drop primarily reflects a reduction in debt instruments, while equity instruments saw only marginal decreases. Notably, 89% of the outward stock consisted of equity instruments, with the remaining 11% in debt securities, a ratio that has remained consistent over time.

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Conversely, the inward FDI stock contracted to €373.6161 billion in 2024 from €400.8570 billion in 2023. This change was mainly due to a decrease in equity investments, even as debt components saw an upward trend. The inward portfolio was composed of 94% equity instruments and 6% debt instruments.

Persistently Negative FDI Transactions

FDI transactions remained negative throughout 2024, totaling -€5.1112 billion. Outward transactions amounted to -€22.4668 billion, including -€26.1077 billion in equity positions (excluding reinvested earnings) and -€4.4716 billion in debt instruments. Reinvested earnings contributed positively by €8.1125 billion, partially offsetting these declines.

On the inward side, transactions registered -€17.3556 billion, with the primary drag coming from equity transactions (net of reinvested earnings) declining by -€44.7574 billion. However, reinvested earnings and debt instruments helped cushion these losses, contributing €14.2787 billion and €13.1231 billion, respectively.

Declining Revenue From FDI

Net revenue derived from FDI also turned more negative, widening to -€3.4279 billion in 2024 from -€2.6218 billion in 2023. Outbound FDI revenues increased to €25.8693 billion, while inbound revenues reached €29.2972 billion, underscoring that the income from inward flows exceeded that generated by outflows.

Europe Emerges As The Dominant Investment Partner

Europe continues to be the principal geographical partner for both outward and inward FDI flows in Cyprus. Outward stocks directed towards Europe amounted to €202.6357 billion—a decline from €227.5702 billion in 2023—with the United States trailing at €60.0404 billion. On the inbound side, investments were primarily sourced from Europe (€295.2872 billion), with the United States making up a smaller portion (€73.1509 billion).

Tertiary Sector Dominance

The majority of FDI, both incoming and outgoing, is directed toward the tertiary sector, particularly within financial and insurance services. This trend highlights the specialization of the Cypriot economy in service-oriented industries. In 2024, the inward FDI stock in the tertiary sector stood at €367.3488 billion, compared to an outward stock of €216.0103 billion.

Worsening Picture Excluding SPEs

Excluding Special Purpose Entities (SPEs) from the classification further deteriorates the net FDI position, which plunged to -€50.2809 billion in 2024 from -€42.6962 billion in 2023. This adjustment underscores the sensitivity of FDI figures to methodological classification and emphasizes the greater extent of foreign capital outflow when SPEs are disregarded.

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