Cyprus Economy Confirmed to be on Strong Growth Path

Cypriot Finance Minister Makis Keravnos welcomed the International Monetary Fund's (IMF) latest forecasts on Wednesday, saying they confirm both government projections and the continued strong performance and resilience of the Cypriot economy. The forecasts, outlined in the IMF's October World Economic Outlook, indicate that the country's fiscal discipline, stable growth, and resilience continue to pay off, even as the global economy faces uncertainty from trade tensions and weaker external demand. The minister highlighted that the IMF now expects Cyprus's GDP to grow by 2.9 per cent in 2025 and 2.8 per cent in 2026, with inflation easing sharply to 0.7 per cent in 2025 and rising slightly to 1.3 per cent in 2026.

Key Takeaways:

The IMF's forecasts confirm Cyprus's economic direction and growth path, with the country's GDP expected to grow by 2.9 per cent in 2025 and 2.8 per cent in 2026.
Inflation is expected to ease sharply to 0.7 per cent in 2025, the lowest in the euro area, before rising slightly to 1.3 per cent in 2026.
Unemployment is expected to remain low at around 4.5 per cent, while the fiscal balance should stay in surplus at roughly 3 per cent of GDP on average between 2025 and 2028.
The IMF's projections place Cyprus among the euro area's more stable economies, with domestic demand and services continuing to support growth despite global headwinds.
The current account deficit is expected to widen to 8.5 per cent of GDP in 2025 and 9.1 per cent in 2026, reflecting higher import growth linked to consumption and increased service activity.

Statistics:

IMF expects growth in Cyprus to reach 2.9 per cent in 2025 and 2.8 per cent in 2026.
Inflation is expected to ease sharply to 0.7 per cent in 2025 and rise slightly to 1.3 per cent in 2026.
Unemployment expected to remain low at around 4.5 per cent.
Fiscal balance expected to stay in surplus at roughly 3 per cent of GDP on average between 2025 and 2028.
Current account deficit expected to widen to 8.5 per cent of GDP in 2025 and 9.1 per cent in 2026.

Sources:

IMF's October World Economic Outlook