Cyprus Central ...
Cyprus Central Bank Lowers 2025 Growth Forecast to 3.1%, but Economy Still Shows Resilience
The Central Bank of Cyprus (CBC) has revised down its GDP growth forecast for 2025 to 3.1%, a slight reduction from earlier projections.
Despite the cut, officials emphasize that the Cypriot economy remains remarkably robust, underpinned by strong domestic demand, resilient consumer spending, and sustained investment in both infrastructure and services.
Key macroeconomic indicators remain healthy: unemployment is declining, and inflation is expected to moderate , the central bank projects inflation around 1.6% for 2025, easing from higher recent levels.
Meanwhile, public finances appear relatively sound: the government continues to run a surplus, public debt is being gradually reduced, and fiscal discipline is a stated priority.
On the property front, there are bright spots: property prices in Cyprus rose in Q3 2025, led by demand in Limassol.
Cyprus Property News
This mirrors the “real-estate-plus” nature of Cyprus’ transformation, where construction, tourism, and ICT are all helping fuel economic expansion.
However, there are risks. The CBC warns that global trade uncertainty could weigh on external demand, particularly since Cyprus relies heavily on services like tourism and ICT.
Also, while investment (especially from EU-backed Recovery and Resilience Facility projects) is ramping up, the challenge will be sustaining that momentum in an increasingly volatile geopolitical environment.
Lowering the forecast to 3.1% may look like a disappointing adjustment, but in context, it’s a sign of maturity , not panic. For a small, open economy like Cyprus, 3% growth is quite impressive, particularly in a difficult global climate. The country’s strategy of leaning into high-value sectors (like ICT, real estate, and innovation) appears to be paying off.
That said, policymakers should not become complacent. To lock in long-term gains, Cyprus needs to double down on structural reforms: make its business environment more conducive to innovation, continue attracting high-quality foreign investment, and safeguard public finances even in good times. If it does so, Cyprus could strengthen its position as not just a Mediterranean tourist hub, but a modern, diversified economy.
Market Cyprus - News Service
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