gdp growth — The Cyprus economy has shown remarkable growth, with a GDP increase of 3.9 percent in real terms for 2024, underscoring the effectiveness of sound fiscal policy.
Gdp growth: Revised Economic Data Highlights Growth
According to revised national accounts data released by the state statistical service, Cystat, the Gross Domestic Product (GDP) at current prices surged by 7.2 percent, reaching €34.77 billion. President Nikos Christodoulides has welcomed these figures, attributing them to responsible financial management.
President Christodoulides’ Remarks
In a post on the social media platform X, Christodoulides stated, “Responsible fiscal policies, far from populism and cheap promises, bring results.” He further noted that the GDP revision confirms the strength of the economy and projected growth rates of between 3.5 percent and 3.9 percent for 2025, with public debt anticipated to remain below 60 percent of GDP.
Key Economic Sectors Driving Growth
The growth rate reported by Cystat is primarily attributed to strong performances across several sectors. Notably, the information and communication sector emerged as the highest performer, with a GDP increase at current prices of 17.5 percent and 11.3 percent in real terms, amounting to €3.59 billion and €3.32 billion respectively.
- Accommodation and Food Services: Grew by 11.3 percent at current prices and 6.2 percent in real terms, totalling €2.03 billion and €1.80 billion.
- Construction: Expanded by 8.5 percent at current prices and 5.3 percent in real terms, generating €1.73 billion and €1.42 billion.
- Wholesale and Retail Trade: Increased by 6.6 percent in current prices and 4.2 percent in real terms, contributing €3.58 billion and €2.70 billion to the economy.
- Public Administration and Defence: Rose by 10 percent in current prices and 4.4 percent in real terms, reaching €2.64 billion and €2.04 billion.
Consumption and Investment Trends
In terms of expenditure, private final consumption saw a rise of 5.8 percent at current prices, reaching €19.92 billion, while real terms growth was 4.0 percent, totalling €17.80 billion. Government final consumption also increased, by 7.0 percent at current prices and 1.6 percent in real terms, totalling €6.40 billion and €5.00 billion respectively.
Gross capital formation, a crucial indicator of economic health, reached €7.19 billion at current prices, reflecting a 3.2 percent increase, while real terms growth was modest at 0.6 percent, totalling €6.01 billion.
Trade Performance
Cyprus’ trade performance has also been noteworthy, with exports of goods and services rising by 7.9 percent in current prices and 6.1 percent in real terms, amounting to €33.73 billion and €30.48 billion respectively. Conversely, imports grew by 6.1 percent at current prices and 5.0 percent in real terms, totalling €32.47 billion and €29.80 billion.
Future Economic Outlook
Looking ahead, the International Monetary Fund (IMF) has revised its forecasts for Cyprus upwards, expecting GDP growth of 2.9 percent in 2025 and 2.8 percent in 2026. This marks an improvement from the April estimates of 2.5 percent and 2.7 percent. Despite global demand showing signs of weakness, the IMF noted that Cyprus is performing better than anticipated.
Inflation in Cyprus is projected to ease significantly, dropping to 0.7 percent in 2025 and 1.3 percent in 2026, which would be the lowest rates in the euro area. However, the current account deficit is expected to widen to 8.5 percent of GDP in 2025 and 9.1 percent in 2026, primarily due to stronger imports driven by domestic demand. Unemployment is forecast to remain low, estimated at 4.5 percent in 2025 and 4.7 percent in 2026.
Global Economic Context
On a global scale, the IMF anticipates world growth of 3.2 percent in 2025 and 3.1 percent in 2026, with advanced economies expected to grow by 1.6 percent. Nevertheless, the IMF has warned that trade tensions and ongoing uncertainties continue to pose challenges to global economic prospects.
