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Cyprus On Track For Robust Economic Growth: New Projections Reveal Positive Trends

In a significant update, credit rating agency Morningstar DBRS has revised its economic projections for Cyprus, showcasing a notably positive outlook for the nation’s economy.As per the latest forecasts, Cyprus is poised for a stronger economic trajectory, with the agency enhancing its 2025 GDP growth expectations by 0.3 percentage points, now anticipating a total expansion of 3.1%.

The unemployment figures also indicate good news, with predictions of a reduction to 4.9% in 2025—a 0.2 percentage point improvement from December’s forecast. This trend is expected to carry into 2026, maintaining a 4.9% rate.

Compared to other European countries, Cyprus is projected to outpace the average growth rate, joining the ranks of nations like Denmark, Spain, and Malta in swift economic progression. The surge is attributed to robust net export growth, favorable domestic investment conditions, and increasing consumer demand. These are encouraging signs for anyone considering investing in Cyprus, especially with its reopened digital nomad visa applications.

Recent upgrades in Cyprus’ credit rating—from BBB (high) to A (low) with a positive outlook—underscore the resilience and potential of its economy. Key factors include significant debt reduction, with public debt expected to decline from 96.5% of GDP in 2021 to 56.7% by 2026, supported by strong economic growth and fiscal surpluses.

However, future improvements depend on sustained debt reduction and resilience against geopolitical and fiscal challenges. A potential downgrade might occur if public debt or banking liabilities rise sharply.

These forecasts highlight the optimistic economic atmosphere in Cyprus, making it an attractive spot for potential investments and financial activities.

EU Moderates Emissions While Sustaining Economic Momentum

The European Union witnessed a modest decline in greenhouse gas emissions in the second quarter of 2025, as reported by Eurostat. Emissions across the EU registered at 772 million tonnes of CO₂-equivalents, marking a 0.4 percent reduction from 775 million tonnes in the same period of 2024. Concurrently, the EU’s gross domestic product rose by 1.3 percent, reinforcing the ongoing decoupling between economic growth and environmental impact.

Sector-By-Sector Performance

Within the broader statistics on emissions by economic activity, the energy sector—specifically electricity, gas, steam, and air conditioning supply—experienced the most significant drop, declining by 2.9 percent. In comparison, the manufacturing sector and transportation and storage both achieved a 0.4 percent reduction. However, household emissions bucked the trend, increasing by 1.0 percent over the same period.

National Highlights And Notable Exceptions

Among EU member states, 12 reported a reduction in emissions, while 14 saw increases, and Estonia’s figures remained static. Notably, Slovenia, the Netherlands, and Finland recorded the most pronounced declines at 8.6 percent, 5.9 percent, and 4.2 percent respectively. Of the 12 countries reducing emissions, three—Finland, Germany, and Luxembourg—also experienced a contraction in GDP growth.

Dual Achievement: Environmental And Economic Goals

In an encouraging development, nine member states, including Cyprus, managed to lower their emissions while maintaining economic expansion. This dual achievement—reducing environmental impact while fostering economic activity—is a trend that has increasingly influenced EU climate policies. Other nations that successfully balanced these outcomes include Austria, Denmark, France, Italy, the Netherlands, Romania, Slovenia, and Sweden.

Conclusion

As the EU continues to navigate its climate commitments, these quarterly insights underscore a gradual yet significant shift toward balancing emissions reductions with robust economic growth. The evolving landscape highlights the critical need for sustainable strategies that not only mitigate environmental risks but also invigorate economic resilience.

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