Recent economic data released by the University of Cyprus Economics Research Centre (CypERC) indicates a steady, moderate growth trajectory for Cyprus. These key indicators for November 2025, alongside government fiscal updates and corporate performance reports, suggest an economy that is proving resilient. However, acknowledged vulnerabilities within the geopolitical and energy sectors continue to be a cause for careful management.
The Composite Leading Economic Index, a crucial predictor of future economic activity, experienced a 1.8% annual increase last November. This sustained expansion was largely driven by a strong influx of tourists, a vibrant retail market, and consistent property transactions. Furthermore, a recent decrease in global oil prices provided additional support to this positive trend. A minor counteracting factor was a slight reduction in electricity generation, even after accounting for seasonal temperature variations.
Simultaneously, the broader Economic Sentiment Indicator remained largely unchanged, registering a minimal dip of 0.1 point to 104.0. While the overall figure appeared stable, confidence levels exhibited a mixed pattern across different sectors. Retail, construction, and industrial sectors, along with consumers, reported increased confidence. Conversely, the vital services industry experienced a slight decline in sentiment. Importantly, a decrease in the associated Economic Uncertainty Indicator suggests that businesses and households are facing a somewhat clearer, albeit still complex, future outlook.
On the fiscal front, the government has presented an encouraging forecast for debt reduction. The Public Debt Management Office now projects the national debt to decrease to 55.3% of Gross Domestic Product by the end of 2025. A further reduction to 50.9% is anticipated for 2026, prompting a lowered borrowing ceiling for the current year. Finance Minister Makis Keravnos, in his parliamentary address, acknowledged the potential for adverse scenarios, stating, “The probability of increased market volatility due to ongoing geopolitical tensions... is considered an adverse scenario.”
In the corporate sphere, the state-controlled Electricity Authority of Cyprus (EAC) announced an increase in its annual net profit, reaching €37.3 million for 2024. This improved performance was significantly influenced by a €45 million reduction in costs related to greenhouse gas emission allowances. The EAC has committed these funds to strategic investments, including a €45 million network infrastructure upgrade and a €50 million smart grid collaboration with Cyta. Chairman George Petrou also addressed public concerns, firmly dismissing any speculation regarding an imminent 13% increase in electricity tariffs.
Despite these positive economic developments, a persistent social challenge remains. Official statistics reveal that energy poverty affected 17.5% of Cypriot households in 2023, an increase from the previous year. This highlights the ongoing impact of high energy costs on a significant portion of the population. Collectively, the economic data depicts an economy demonstrating commendable stability and improving fiscal health, effectively leveraging strengths in tourism and domestic demand. Nevertheless, policymakers and businesses must remain vigilant, recognizing that this equilibrium is vulnerable to external shocks from international tensions and energy market fluctuations. Strategic investments are being made to foster a more sustainable and affordable energy future.