Economy in Cyprus
Economy of Cyprus: A 10-Year Comparison (2014-2024)
GDP Growth
- 2014-2019: Cyprus experienced steady economic growth, recovering from the financial crisis of 2013. The GDP growth rate averaged around 3.5% per year during this period1.
- 2020: The COVID-19 pandemic caused a significant contraction in the economy, with GDP shrinking by 5.1%1.
- 2021-2023: The economy rebounded strongly, with GDP growth rates of 6.6% in 2021 and 5.6% in 2022. In 2023, the growth rate slowed to 2.47%1.
- 2024: The economy expanded by 3.6%, driven by private consumption and investment3.
Inflation and Prices
- 2014-2019: Inflation rates were relatively low, averaging around 1.2% per year.
- 2020: Inflation was subdued due to the pandemic, with a rate of 0.5%.
- 2021-2023: Inflation increased, reaching 2.5% in 2021 and 3.1% in 2022.
- 2024: The Harmonized Index of Consumer Prices (HICP) inflation rate was 2.2%.
Employment
- 2014-2019: The unemployment rate steadily declined from a high of 16% in 2014 to 7.1% in 2019.
- 2020: Unemployment rose to 8.5% due to the pandemic.
- 2021-2023: The labor market improved, with the unemployment rate falling to 5.4% in 2022.
- 2024: The unemployment rate stood at 4.9%, with employment growth of 2.7%.
Government Finances
- 2014-2019: The government maintained a budget surplus, averaging 1.5% of GDP.
- 2020: The budget deficit widened to 4.5% of GDP due to pandemic-related expenditures.
- 2021-2023: The budget balance returned to surplus, reaching 2% of GDP in 2023.
- 2024: The budget surplus increased to 3.5% of GDP.
Public Debt
- 2014-2019: Public debt as a percentage of GDP decreased from 108% in 2014 to 95% in 2019.
- 2020: Public debt rose to 118% of GDP due to increased borrowing during the pandemic.
- 2021-2023: Public debt declined to 70.3% of GDP in 2023.
- 2024: Gross public debt was 66.4% of GDP, with a projected decline to 61.4% in 2025.
External Sector
- 2014-2019: The current account deficit averaged around 4% of GDP.
- 2020: The deficit widened to 10% of GDP due to reduced tourism revenues.
- 2021-2023: The current account deficit narrowed to 8.5% of GDP in 2023.
- 2024: The current account deficit was 9.2% of GDP, with a projected decline to 8.4% in 2025.
Key Sectors
- Tourism: The tourism sector has been a significant contributor to the economy, with strong growth in tourist arrivals and receipts, especially post-pandemic.
- Construction: The construction sector saw positive sentiment and growth, supported by investment and funds from the Recovery and Resilience Facility.
Risks and Challenges
- Geopolitical Tensions: Ongoing tensions in the Middle East could disrupt supply chains and increase production costs, posing risks to the tourism sector.
- Energy Prices: High oil dependence and limited integration with the European electricity market make Cyprus vulnerable to fluctuations in energy prices.
Overall, the economy of Cyprus has shown resilience and growth over the past decade, with significant improvements in GDP growth, employment, and public finances. However, it remains susceptible to external risks and challenges.
If you have any specific questions or need further details, feel free to ask!
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