NICOSIA – The Cypriot economy maintained a stable trajectory of growth through the final quarter of 2025, according to the latest data from the University of Cyprus Economics Research Centre (CypERC). Concurrently, the state-owned Electricity Authority of Cyprus (EAC) has reported a strengthened financial performance, even as the government grapples with the dual challenges of securing energy independence and addressing a concerning rise in household energy poverty.
The Composite Leading Economic Index, a crucial barometer of future economic activity, registered a 1.8% annual increase in November. This figure, consistent with readings from the preceding two months, indicates a sustained, albeit measured, pace of expansion. Analysts suggest this resilience points to an economy navigating global headwinds with cautious optimism. Supporting this view, the Economic Uncertainty Indicator fell for a second consecutive month to 10.9 points in November. However, the closely watched Economic Sentiment Indicator experienced a marginal dip to 104.0, reflecting a nuanced landscape where confidence improved in retail, construction, and industry but softened within the vital services sector.
On the energy front, the EAC announced an after-tax profit of €37.3 million for 2024, a slight improvement over the previous year. A significant factor in this financial bolstering was a substantial €45 million reduction in costs associated with greenhouse gas emission allowances, which totaled €211 million. This fiscal breathing room is being strategically redirected. The authority has committed €45 million to critical infrastructure upgrades and finalized a €50 million contract for an Advanced Metering Infrastructure system, a cornerstone for a modernized, "smart" national grid.
EAC Chairman George Petrou directly addressed public concern over costs, stating the utility was "on a course for cheaper electricity in 2025." He further sought to quell anxieties by having "dismissed speculation of a much larger 13% hike" in tariffs. This commitment to affordability is set against a backdrop of ambitious capacity projects. A major electricity storage system with 120MW capacity is slated to become operational by June 2026, a critical step given estimates that Cyprus will require up to 600MW of storage by 2030 to manage renewable integration and ensure grid stability.
Energy Minister George Papanastasiou oversees a sector where strategic investments collide with a pressing social dilemma. While millions are earmarked for technological advancement, official statistics reveal a deepening domestic crisis: energy poverty impacted 17.5% of Cypriot households in 2023, a notable rise from 15.1% the year before. This stark increase underscores the complex equilibrium policymakers must strike between funding long-term security and providing immediate, tangible relief to consumers.
The overarching narrative for Cyprus is one of deliberate progression. The economic indicators, while not spectacular, suggest stability and diminishing uncertainty. The energy sector’s strategy is clearly pivoting towards modernization and preparedness, with significant capital flowing into infrastructure that promises greater efficiency and resilience. Nevertheless, the rising specter of energy poverty serves as a potent reminder that the success of these macro-level plans will ultimately be judged by their impact on the household balance sheet. The coming years will test the nation's ability to synchronize its economic stability with an equitable and secure energy future.