Cyprus GDP Hits ...
Cyprus GDP Hits €34.77 Billion for 2024, Driven by ICT and Tourism Growth
According to the revised national accounts released this week by the state statistical service, Cyprus’s economy achieved a real-term growth rate of 3.9 % in 2024, raising the nominal Gross Domestic Product (GDP) to around 34.77 billion.
Breaking down the contributions:
The Information & Communication (ICT) sector recorded the highest growth, with current-price growth of 17.50 % and real-term growth of 11.30%, reaching 3.59 billion and 3.32 billion respectively.
The accommodation & food services sector rose by 11.30 % at current prices and 6.20 % in real terms, to 2.03 billion and 1.80 billion respectively.
Construction increased by 8.50 % at current prices and 5.30 % in real terms, generating 1.73 billion and 1.42 billion respectively.
Wholesale and retail trade (including motor vehicle repair) rose by 6.60 % at current prices and 4.20 % in real terms with output 3.58 billion and 2.70 billion respectively.
From an expenditure side:
Private final consumption increased by 5.80 % at current prices (4.00 % in real terms), reaching 19.92 billion and 17.80 billion respectively.
Government final consumption increased by 7.00 % in current prices (1.60 % in real terms) to 6.40 billion and 5.00 billion respectively.
Gross capital formation reached 7.19 billion (3.20 % increase), and in real terms rose 0.60 % to 6.01 billion.
Exports of goods and services rose 7.90 % at current prices, 6.10 % in real terms to 33.73 billion and 30.48 billion respectively. Imports grew 6.10 % at current price and 5.00 % in real terms to 32.47 billion and 29.80 billion respectively.
The statistical service also noted that the International Monetary Fund (IMF) has revised its forecast upwards for Cyprus: the IMF now expects growth of 2.90 % in 2025 and 2.80 % in 2026, compared with earlier estimates of 2.50 % and 2.70 %. Inflation is projected to ease to 0.70 % in 2025 and 1.30 % in 2026 , the lowest in the euro-area according to those projections. Meanwhile, the current account deficit is forecast to widen (to 8.50 % of GDP in 2025 and 9.10 % in 2026) due to stronger imports. Unemployment is expected to remain low at 4.50 % in 2025 and 4.70 % in 2026.
This economic update is very encouraging for Cyprus, for a number of reasons:
Diversification showing: The strong performance of the ICT (17.5% growth at current prices) is particularly striking. Historically, Cyprus’s economy has been heavily reliant on tourism, real-estate and services. The emergence of the ICT sector as a major contributor suggests bolder diversification is underway. That provides resilience against tourism-or real-estate-only shocks.
Tourism rebound & consumption strength: The accommodation & food service growth confirms that tourism and hospitality are recovering well post-pandemic, contributing notably to growth. Combined with robust private consumption, this signals healthy domestic demand, which is critical.
Moderate investments & imports: One caveat is that gross capital formation’s real growth was only 0.60 % , modest for an economy targeting long-term higher-value growth. Also the rising imports and projected current-account deficit suggest that domestic demand is still importing growth rather than purely being export-driven.
Favourable inflation and unemployment outlook: Low inflation (projected 0.7%) and a low unemployment rate (4.5%) are positive signals. They suggest that Cyprus retains some macro-stability despite global headwinds.
Growth moderation ahead: While 3.9% growth is strong, the IMF’s forecast (2.9% for 2025 and 2.8% for 2026) indicates expectations of a slowdown. This is not surprising in the context of global economic uncertainty, but it underscores that sustaining high growth will require structural reforms, increased investment, upgrade of productivity and export-oriented growth.
Structural challenge – external trade & debt: The widening current-account deficit (8.5% of GDP) is a structural risk. Dependence on external finance may leave Cyprus vulnerable to capital-flow or interest-rate shocks. Also, modest growth in investment signals that building the capital base for the next growth cycle may lag.
Overall, this update is good news , it reflects an economy that is growing, diversifying and showing resilience. The spotlight on ICT is particularly important in building the future. My view is that the government should now double-down: promote investment in high-tech, boost export-oriented manufacturing or services, enhance workforce skills, and ensure the business environment supports innovation. At the same time, they must keep an eye on external imbalances and investment gaps.
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