Cyprus’ household and corporate debt ratios are experiencing a positive trend, as revealed by the Central Bank of Cyprus (CBC) in its latest report. The CBC announced on Friday that both sectors benefited from robust economic growth and improved balance sheets in the second quarter of 2025.
- This comprehensive data from the CBC underscores a trend towards financial health in Cyprus, with declining debt ratios and a well-distributed asset base contributing to a more resilient economy.
Debt ratios: Household Debt Levels Decrease
As of June 2025, household debt in Cyprus amounted to €19.70 billion, making up 55 per cent of the country’s GDP. This figure represents a slight decrease from the previous quarter, attributed to an increase in the gross domestic product.
The decline is particularly noteworthy when viewed against the backdrop of past performance; the household debt-to-GDP ratio has dropped by around 62 per cent since December 2016. This ongoing deleveraging trend highlights the effectiveness of strategies aimed at improving personal finance within the region.
Corporate Debt Shows Improvement
Non-financial corporations also demonstrated a positive shift, with total debt recorded at €40 billion, equivalent to 112 per cent of GDP. Like households, corporations have seen a marginal quarterly decline in their debt levels, again linked to economic growth.
Since December 2016, the debt ratio for non-financial corporations has decreased by an impressive 94 per cent, signalling strong recovery and repair of private sector balance sheets. This significant progress bodes well for future economic stability and growth.
Financial Asset Composition
The CBC’s financial accounts also outlined the composition of assets held by households and corporations. As of mid-2025, household financial assets reached €62.80 billion. A breakdown reveals that 54 per cent is held in cash, deposits, and loans, while 25 per cent is in shares, and 18 per cent in various other financial instruments.
For non-financial corporations, total financial assets amounted to €74.30 billion. In this case, 20 per cent is in cash and deposits, 41 per cent in shares, and the remainder spread across loans and other financial assets. This distribution indicates a solid financial footing within the corporate sector.
Sector-Specific Financial Positions
The CBC’s report further detailed financial positions within the insurance, investment, and pension sectors. Insurance companies reported assets totalling €5.80 billion, with 7 per cent in cash and deposits, 28 per cent in debt securities, and 46 per cent in shares.
Investment funds held €7.10 billion in assets, with a substantial 79 per cent allocated to shares. Pension funds, meanwhile, recorded total investments of €4.80 billion, with 55 per cent in shares and significant portions in cash and deposits, loans, and debt securities.
This comprehensive data from the CBC underscores a trend towards financial health in Cyprus, with declining debt ratios and a well-distributed asset base contributing to a more resilient economy.
