November 2025 economic indicators for Cyprus have revealed a landscape of cautious optimism, according to recent analyses from the University of Cyprus Economics Research Centre. While projections for future economic activity remain positive, a closer examination of sectoral confidence has highlighted underlying complexities. Simultaneously, the Electricity Authority of Cyprus (EAC) has announced substantial annual profits, facilitating crucial infrastructure upgrades despite growing concerns about energy poverty affecting a significant portion of the population.
The Composite Leading Economic Index, a key predictor of forthcoming economic performance, experienced an annual growth of 1.8% in November, continuing a trend observed over the preceding two months. This sustained expansion has been predominantly influenced by encouraging developments in consumer sentiment, a surge in tourist arrivals, and vigorous activity within the retail and property markets. Nevertheless, a decrease in temperature-adjusted electricity production somewhat moderated the overall positive momentum.
Further insight into public and business sentiment was provided by the Economic Sentiment Indicator, which registered a modest decline to 104.0 points from 104.1 in October. This minor fluctuation belied significant sector-specific divergences, as confidence notably improved in retail, construction, manufacturing, and among individual consumers. Conversely, the vital services sector experienced a weakening of its outlook. In a potentially reassuring development, the Economic Uncertainty Indicator has now fallen for two consecutive months, reaching 10.9 points, largely due to diminished consumer apprehension.
Regarding the energy sector, the EAC reported an after-tax profit of €37.3 million for 2024, surpassing the previous year's earnings of €36.1 million. A key contributor to this improved financial outcome was a substantial €45 million reduction in expenses related to greenhouse gas emission allowances. The utility company is strategically allocating these financial resources towards modernization initiatives, having earmarked €45 million for network infrastructure enhancements and securing a €50 million contract for an advanced smart metering system.
These economic and corporate developments are unfolding against a backdrop of persistent socio-economic challenges. Official data indicates that energy poverty impacted 17.5% of Cypriot households in 2023, representing an increase from 15.1% the previous year. Addressing public anxieties, the EAC Chairman has sought to allay fears regarding significant electricity tariff hikes.
Looking forward, national energy policy is prioritizing the expansion of storage capacity to bolster grid stability and facilitate the integration of renewable energy sources. A 120-megawatt storage system is anticipated to become operational by mid-2026, with projections suggesting that "at least 600MW of storage capacity will be required by 2030."
The convergence of these economic reports paints a picture of an economy undergoing a deliberate and multifaceted transition. While leading economic indicators and reduced uncertainty suggest underlying growth potential, disparities in sectoral confidence and the critical issue of energy affordability present discernible policy hurdles. The EAC's robust financial performance is enabling essential investments in grid resilience and smart technology, which will be indispensable for managing costs and meeting the substantial energy storage demands of Cyprus's future.