Cyprus has emerged as a standout performer in the European Union, recording a remarkable 1.4 per cent increase in its Gross Domestic Product (GDP) during the fourth quarter of 2025. This surge positions the Republic of Cyprus alongside Croatia, boasting the third-highest growth rate in the EU, surpassed only by Malta at 2.1 per cent and Lithuania at 1.7 per cent, according to the latest data from Eurostat.
In a broader context, the euro area and the EU saw seasonally adjusted GDP growth of 0.2 per cent during the same quarter, reflecting a slight slowdown from the third quarter, when GDP increased by 0.3 per cent in the euro area and by 0.4 per cent in the EU.
The annual GDP growth for 2025 indicates a positive trend, with the euro area growing by 1.4 per cent and the EU by 1.5 per cent, both showing improvement over 2024 figures of 0.9 per cent and 1.1 per cent respectively.
When comparing year-on-year performance, both the euro area and the EU demonstrated a rise in GDP of 1.2 per cent and 1.4 per cent respectively during the fourth quarter. This contrasts with the decreases observed in several other EU countries, such as Ireland, which faced a significant decline of 3.8 per cent, and Romania, which saw a decrease of 1.9 per cent.
While Cyprus flourished, the United States also recorded a GDP increase of 0.4 per cent in the fourth quarter, following a 1.1 per cent growth in the preceding quarter. Year-on-year, the US GDP rose by 2.2 per cent.
The consumer landscape contributed significantly to this economic growth. Household final consumption expenditure rose by 0.4 per cent in the euro area and by 0.5 per cent in the EU during the final quarter of 2025. This increase follows previous gains of 0.2 per cent and 0.3 per cent respectively. Similarly, government final consumption expenditure also saw an upward trend, with increases of 0.5 per cent in the euro area and 0.7 per cent in the EU.
Investment trends showed a favourable outlook as well, with gross fixed capital formation rising by 0.6 per cent in both the eurozone and the EU. Despite this, exports experienced a downturn, decreasing by 0.4 per cent in the euro area and 0.3 per cent in the EU, while imports saw a minor decline of 0.2 per cent in the euro area.
In terms of employment, Cyprus has shown remarkable resilience, recording one of the highest growth rates in the EU at 0.8 per cent. This figure is comparable to Ireland and Malta, which both recorded a 1.3 per cent increase, while Spain matched Cyprus’s rate of 0.8 per cent. Across the euro area and the EU, employment rose by 0.2 per cent in the fourth quarter.
Year-on-year, employment figures increased by 0.7 per cent in the euro area and by 0.6 per cent in the EU. The total employment level in the EU reached a staggering 221.1 million, with 172.6 million located within the euro area. This landscape reflects a robust labour market amid fluctuating economic conditions.
Productivity metrics also illustrate positive trends, with actual hours worked increasing by 0.6 per cent in the euro area and by 0.5 per cent in the EU during the final quarter. Labour productivity, based on persons, rose by 0.6 per cent in the euro area compared to the same quarter of 2024.
The comprehensive data released by Eurostat indicates a broad-based recovery across the EU, with every member state experiencing GDP growth in 2025 compared to 2024. The most significant increases were noted in Ireland at 12.3 per cent, Malta at 4.0 per cent, and Cyprus at 3.8 per cent.
