Cyprus Economic Bulletin 2024: Resilience Amid Global Uncertainty

In 2024, Cyprus’s economy demonstrated strong recovery and growth, achieving an impressive 3.7% GDP increase despite geopolitical disruptions and internal challenges. Key drivers included steady development in tourism, construction, and retail, supported by active investment flows.

Low unemployment rates, maintained at approximately 5%, reflected near-full employment levels. At the same time, inflation was effectively managed, dropping to 2.2% in 2024 compared to 3.9% in the previous year.

Public finances remained stable, with a budget surplus of €867.5 million recorded in the third quarter. Meanwhile, public debt continued to decrease, projected to reach only 56.7% of GDP by 2026. However, the economy still faces challenges such as non-performing loans, rising public sector wage costs, and pension fund deficits in semi-governmental organizations.

The Cypriot government has implemented various measures to support the real economy, including reducing energy costs, introducing 0% VAT for essential goods, and providing housing solutions to protect vulnerable groups.

Despite oil prices remaining above $80 per barrel, adding pressure to fuel costs, the economy achieved a 3.6% GDP growth rate in the first quarter. Investor confidence was further reinforced when a €1 billion, 7-year bond attracted €9.6 billion in investment.

Tourism continued to flourish, with 3.91 million visitors between January and November, a 5% increase compared to the same period last year. Revenue and tourist numbers during the summer months reached record highs, underscoring the sector’s crucial role in the economy.

Additionally, strategic energy projects, such as the Great Sea Interconnector linking Cyprus and Crete, have made significant progress, laying the groundwork for sustainable development.

International credit rating agencies continued to express confidence in Cyprus’s economic potential, with several upgrades in 2024, restoring the country to an “A” rating for the first time in 13 years.

Overall, 2024 concluded with remarkable economic achievements, solidifying Cyprus’s position as a bright spot in a globally turbulent economic landscape.