Cyprus's economy has demonstrated a steady growth pattern throughout the final quarter of 2025, as indicated by recent figures from the University of Cyprus Economics Research Centre. Simultaneously, the Electricity Authority of Cyprus (EAC) has reported improved financial results. However, the nation is still confronting significant challenges related to energy independence and escalating household energy poverty.
The Composite Leading Economic Index, a key predictor of future economic performance, saw an annual increase of 1.8% in November. This sustained expansion, consistent with previous months, suggests the economy is cautiously navigating global economic uncertainties. Furthermore, the Economic Uncertainty Indicator declined for the second consecutive month, reaching 10.9 points. Conversely, the Economic Sentiment Indicator experienced a slight decrease to 104.0, highlighting varied confidence levels across different sectors.
Financially, the EAC announced an after-tax profit of €37.3 million for 2024, an improvement from the prior year. A substantial €45 million reduction in costs for greenhouse gas emission allowances significantly contributed to this positive outcome. These savings are strategically being reinvested into crucial infrastructure upgrades and a new Advanced Metering Infrastructure system. This system is fundamental to developing a modernized, interconnected national electricity grid.
EAC Chairman George Petrou has reassured the public about electricity costs, predicting cheaper rates in 2025. He also dismissed speculation about a significant tariff increase, aiming to alleviate consumer concerns. The authority is also investing in ambitious capacity expansion projects. A major electricity storage system with 120MW capacity is expected to be operational by June 2026. This development is vital, as Cyprus anticipates needing up to 600MW of storage by 2030 to manage renewable energy integration effectively.
The Ministry of Energy is managing a sector where technological advancements intersect with pressing social issues. While substantial funds are allocated to modernization, official data reveals a growing crisis of energy poverty. In 2023, 17.5% of Cypriot households experienced energy poverty, a notable increase from the previous year. This trend emphasizes the delicate balance policymakers must achieve between long-term energy security investments and immediate consumer relief.
Overall, Cyprus is experiencing a period of measured progress. Economic indicators point towards stability and reduced uncertainty. The energy sector's strategic focus is on modernization and resilience, with significant capital being directed towards infrastructure improvements. Nevertheless, the rising prevalence of energy poverty serves as a critical reminder that the success of these national strategies will ultimately be evaluated by their impact on individual households. The coming years will be crucial for Cyprus to harmonize its economic stability with an equitable and secure energy future.