Cyprus economy outperforms euro area peers

Cyprus’ economy recorded stronger growth in the fourth quarter of 2025, with new national and European data confirming that the country continued to outperform the wider region.

According to a flash estimate by the statistical service (Cystat), Cyprus’ seasonally adjusted gross domestic product increased by 4.5 per cent year-on-year in the fourth quarter of 2025.

The statistical service said the positive GDP growth rate was mainly attributed to wholesale and retail trade and repair of motor vehicles, information and communication, and hotels and restaurants.

On a quarterly basis, GDP increased by 1.4 per cent, following growth of 0.9 per cent in the third quarter, 0.8 per cent in the second and 1.3 per cent in the first quarter.

The flash estimate aims to provide an early picture of the overall development of the Cyprus economy using preliminary data available about 45 days after the end of the quarter, before the full quarterly national accounts are released.

Meanwhile, Eurostat’s latest flash estimate reinforced Cyprus’ performance within the European context.

Eurostat said that seasonally adjusted GDP in both the euro area and the European Union increased by 0.3 per cent in the fourth quarter of 2025 compared with the previous quarter.

In the third quarter, GDP had grown by 0.3 per cent in the euro area and 0.4 per cent in the EU.

On an annual basis, GDP increased by 1.3 per cent in the euro area and 1.5 per cent in the EU in the fourth quarter of 2025, while estimated growth for the whole of 2025 reached 1.5 per cent and 1.6 per cent respectively.

Employment also continued to rise across Europe. Eurostat said the number of employed persons increased by 0.2 per cent in both the euro area and the EU in the fourth quarter of 2025 compared with the previous quarter.

Compared with the same quarter of the previous year, employment rose by 0.6 per cent in the euro area and 0.7 per cent in the EU, while for 2025 overall employment expanded by 0.7 per cent and 0.5 per cent respectively.

Eurostat’s tables on growth rates of employment in persons showed that quarterly employment growth in the euro area stood at 0.2 per cent in the first quarter, slowed to 0.1 per cent in the second, and returned to 0.2 per cent in both the third and fourth quarters.

In the EU, employment increased by 0.1 per cent in the first three quarters before rising to 0.2 per cent in the fourth quarter.

On an annual basis, euro area employment growth eased from 0.8 per cent in the first quarter to 0.7 per cent in the second and 0.6 per cent in the third and fourth quarters, while the EU strengthened from 0.4 per cent to 0.7 per cent across the year.

Eurostat data on growth rates of GDP in volume provided further clarity on Cyprus’ relative performance.

Cyprus’ GDP grew by 1.3 per cent in the first quarter of 2025, 0.8 per cent in the second, 0.9 per cent in the third and 1.4 per cent in the fourth, while annual growth accelerated from 3.3 per cent at the start of the year to 4.5 per cent by year end.

By comparison, EU quarterly GDP growth stood at 0.5 per cent, 0.3 per cent, 0.4 per cent and 0.3 per cent across the four quarters of 2025, while the euro area recorded 0.6 per cent, 0.1 per cent, 0.3 per cent and 0.3 per cent respectively.

Country breakdowns showed more moderate growth elsewhere. Germany expanded by 0.3 per cent quarter-on-quarter and 0.4 per cent year-on-year in the final quarter, France by 0.2 per cent and 1.1 per cent, and Italy by 0.3 per cent and 0.8 per cent.

Spain grew faster at 0.8 per cent quarterly and 2.6 per cent annually, while Poland recorded 1.0 per cent quarterly growth and 3.6 per cent year-on-year.