The Central Bank of Cyprus (CBC) forecasts steady economic expansion for 2025, projecting a GDP growth of 3.3%, a reduction in unemployment to 4.6%, and a slowdown in inflation to 1%, according to its latest September 2025 macroeconomic report.<\/p>\n
This is a slight upward revision from the CBC\u2019s June 2025 projections, with GDP expectations increased by 0.2 percentage points, largely attributed to a stronger-than-anticipated performance in the tourism sector. Projections for 2026 and 2027 remain unchanged. At the same time, the unemployment forecast was adjusted downward by 0.2 points for 2025 and 0.1 points for 2026, while inflation was revised lower by 0.4 points in 2025 and 0.2 points in 2027. Core inflation has also been lowered slightly for 2025\u201327.<\/p>\n
Growth Supported by Domestic Demand and Investments<\/strong> Tourism is set to boost net exports, with strong arrivals expected from the UK, Israel, and other EU nations. Technology services, intellectual property-related exports, professional and financial services, and shipping are also expected to support economic activity, although external demand remains sensitive to global trade and geopolitical tensions.<\/p>\n Labor Market Stays Robust<\/strong> Inflation Eases, Expected to Rise Later<\/strong> Core inflation (excluding energy and food) is projected at 2% in 2025, easing slightly to 1.8% in 2026\u201327, reflecting lower industrial goods prices, partially offset by strong demand for services, particularly in tourism.<\/p>\n Risks and Uncertainties<\/strong> Inflation risks are generally tilted upwards, largely due to potential wage increases, corporate profit margins, and stronger private consumption following the 2026 tax reforms. Conversely, lower global energy prices, resolution of the Ukraine conflict, increased oil supply, and reduced electricity costs from Cyprus\u2019s Competitive Electricity Market could ease inflationary pressures.<\/p>\n Source: stockwatch.com.cy<\/em><\/p>","protected":false},"excerpt":{"rendered":" The Central Bank of Cyprus (CBC) forecasts steady economic expansion for 2025, projecting a GDP growth of 3.3%, a reduction in unemployment to 4.6%, and a slowdown in inflation to 1%, according to its latest September 2025 macroeconomic report. This is a slight upward revision from the CBC\u2019s June 2025 projections, with GDP expectations increased […]<\/p>","protected":false},"author":9,"featured_media":118671,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[211],"tags":[],"_links":{"self":[{"href":"https:\/\/lamaisonestates.com\/he\/wp-json\/wp\/v2\/posts\/118669"}],"collection":[{"href":"https:\/\/lamaisonestates.com\/he\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/lamaisonestates.com\/he\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/lamaisonestates.com\/he\/wp-json\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/lamaisonestates.com\/he\/wp-json\/wp\/v2\/comments?post=118669"}],"version-history":[{"count":1,"href":"https:\/\/lamaisonestates.com\/he\/wp-json\/wp\/v2\/posts\/118669\/revisions"}],"predecessor-version":[{"id":118672,"href":"https:\/\/lamaisonestates.com\/he\/wp-json\/wp\/v2\/posts\/118669\/revisions\/118672"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/lamaisonestates.com\/he\/wp-json\/wp\/v2\/media\/118671"}],"wp:attachment":[{"href":"https:\/\/lamaisonestates.com\/he\/wp-json\/wp\/v2\/media?parent=118669"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/lamaisonestates.com\/he\/wp-json\/wp\/v2\/categories?post=118669"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/lamaisonestates.com\/he\/wp-json\/wp\/v2\/tags?post=118669"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
The Cypriot economy is expected to grow slightly slower than 2024\u2019s 3.4%, with GDP at 3.3% in 2025, stabilizing at 3% annually in 2026\u201327. Domestic demand remains the primary driver, fueled by higher real disposable income, easing inflation pressures, and a strong labor market. Significant private investments in infrastructure, digital transformation, green energy, and projects under the Recovery and Resilience Plan are also contributing to growth.<\/p>\n
The labor market is projected to remain resilient, with unemployment falling to 4.6% in 2025 from 4.9% in 2024, before stabilizing around 4.7% in 2026\u201327, edging close to full employment conditions.<\/p>\n
Headline inflation, measured by the Harmonised Index of Consumer Prices (HICP), is forecast to drop to 1% in 2025 from 2.3% in 2024, due to lower energy costs, declining industrial goods prices, and slower food price growth. Inflation is expected to rise again to 2% in 2026 and 2.2% in 2027, driven by energy costs related to the carbon tax and the EU\u2019s expanded Emissions Trading System.<\/p>\n
The CBC highlighted that downside risks to GDP remain, mainly due to potential shocks from global trade disruptions and weaker demand for Cypriot services. On the upside, growth could benefit from planned tax reforms, higher wages, stronger corporate profits, and lower energy prices if geopolitical conditions improve.<\/p>\n