Wage growth and social costs drive up Cyprus’ hourly labour rates

Labour costs in Cyprus rose significantly in the final months of 2025, according to official figures, adding further pressure to the country’s inflation outlook.

Specifically, the Cyprus Statistical Service, using preliminary data, found an increase in hourly labour costs during the fourth quarter of 2025.

The figures indicate that hourly labour costs recorded an annual increase of 2.7 per cent in the fourth quarter of 2025 compared with the same quarter of the previous year.

This rise reflects changes in both key components of labour costs, namely wages and salaries per hour worked and non-wage labour costs per hour worked.

Specifically, wages and salaries per hour worked increased by 2.7 per cent, while non-wage labour costs per hour worked rose by 2.9 per cent on a year-on-year basis.

The data also showed that seasonally adjusted total hourly labour costs increased by 0.7 per cent compared with the previous quarter.

Similarly, seasonally adjusted wages and salaries per hour worked recorded a quarterly increase of 0.7 per cent.

At the same time, seasonally adjusted non-wage labour costs per hour worked also rose by 0.7 per cent compared with the preceding quarter.

The overall figures point to a moderate upward trend in labour costs, reflecting broader developments in the labour market.

These changes highlight ongoing adjustments in employment costs across the Cypriot economy.