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Cyprus Retail Trade Expands in November 2025 Amid Robust Consumer Demand

by THEFUTURE.TEAM

January 6, 2026

Robust Trading Indices Reflect Strong Consumer Confidence

Cyprus experienced a marked expansion in its retail sector in November 2025, buoyed by resilient consumer demand across multiple categories. According to the Statistical Service, the Turnover Value Index for retail trade—excluding motor vehicles—climbed by 4.6% compared with November 2024, while the Turnover Volume Index surged by 7.6%.

Strong Growth Across Key Categories

When using 2021 as the base year, the aggregated value index reached 145.4, and the volume index attained 132.1. Over the January–November period, the sector recorded cumulative growth of 6.2% in value and 7.8% in volume compared to the same period in the previous year. In particular, specialised stores for food, beverages, and tobacco showed an impressive annual performance, with indices rising 17.4% for value and 22.5% for volume. Supermarkets also demonstrated steady progress, with a 5.3% increase in value and an 8% rise in volume.

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Notable Advances in Apparel and Technology

Other segments, including clothing and footwear, posted solid gains—with value up by 4.8% and volume expanding 14.1%—while information and communication equipment saw a notable growth of 6.0% in value and 15.2% in volume. Moderately expanding sectors included household equipment and construction materials, which recorded growth of 4.3% in value and 6.2% in volume.

Sectoral Challenges and Declines

Certain segments, however, faced downward pressure. Cultural and recreation goods declined slightly, with a 1.3% drop in value accompanied by a 1.5% slip in volume. Similarly, retail sales not in stores, including online and mail-order trade, contracted sharply by 13.7% in value and 12% in volume—although they remained positive on a year-to-date basis. Automotive fuel sales also saw a reduction, with value decreasing by 5.8% and volume by 3.6%.

Aggregate Analysis and Methodological Insights

Broader aggregates excluding automotive fuel reveal that retail trade increased by 5.6% in value and 8.7% in volume. Edible goods recorded rises of 7.1% in value and 10.1% in volume, while non-edible goods grew 4.0% in value and 7.5% in volume. Cystat clarified that the Turnover Value Index is calculated at current prices, whereas the Turnover Volume Index is derived at constant prices using the Consumer Price Index as a deflator.

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ECB Raises Deposit Facility Rate For First Time In Nearly Two Years

Economic Shift: ECB Reverses Years Of Declining Rates

The European Central Bank (ECB) confirmed its first interest rate increase in nearly two years, raising the deposit facility rate in response to inflationary pressures and geopolitical uncertainty. Marking a shift in monetary policy, the move follows a period of rate cuts aimed at supporting economic activity and easing financing conditions.

Reevaluation Of Bank Liquidity Strategies

Although the immediate impact will be felt by only part of the borrowing market, the decision carries broader implications for banks. During the period of lower rates, banks maintained significant amounts of excess liquidity with the ECB as returns on these funds declined alongside deposit rates. With the deposit facility rate increasing by 0.25 percentage points to 2.25% from 2.00%, returns on surplus liquidity are expected to improve.

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Higher interest rates, however, could also increase borrowing costs and influence lending conditions across the banking sector.

Transitioning Investment Approaches And Market Dynamics

Banks had already begun diversifying the use of excess liquidity through investments in bonds and by expanding lending activities.

Successive reductions in the deposit facility rate from 3.00% at the end of 2024 through four consecutive cuts in early 2025 reflected a more accommodative policy stance as inflation pressures moderated.

Sectoral Impact And Future Outlook

Data from the ECB’s 2025 monetary policy report show that liquidity in the Cypriot banking system declined from €19.2 billion at the end of 2024 to €18.6 billion by the close of 2025. Despite the reduction, liquidity levels remained elevated. Outstanding loans increased from €27.6 billion to €31.7 billion, while deposits recorded a slight decline. Customer deposits continued to account for the vast majority of funding. By the fourth quarter of 2025, they represented 95% of total liabilities, highlighting their importance as the banking sector’s primary source of financing.

Changes in ECB rates are expected to influence how banks manage liquidity and allocate capital as monetary conditions evolve.