Cyprus economy at a glance

Latest figures for Cyprus: inflation, growth, interest rates, jobs, bond yields, debt and taxes. Updated 6 November 2026. Open Cyprus on the interactive map →

Key figures

Indicator	Latest	Period	Previous
Inflation (consumer prices, year on year)	5.4%	October 2026	5.2% September 2026
Real GDP growth (year on year)	3.3%	Q2 2026	3.0% Q1 2026
Policy rate (European Central Bank)	2.50%	November 2026	2.50% October 2026
Unemployment rate	4.0%	September 2026	4.0% August 2026
10-year government bond yield	3.92%	September 2026	3.62% August 2026
Retail sales (year on year)	7.7%	September 2026	7.0% August 2026
Industrial production (year on year)	−1.3%	August 2026	1.5% July 2026
Wages (year on year)	3.0%	Q2 2026	4.0% Q1 2026
House prices (year on year)	7.9%	Q2 2026	3.4% Q1 2026

Questions and answers

What is the inflation rate in Cyprus?

Cyprus's annual inflation rate was 5.4% in October 2026, up from 5.2% in September 2026.

What is the interest rate in Cyprus?

The European Central Bank deposit facility rate is 2.50% (as of November 2026). The next rate decision is due on 17 December 2026.

How fast is Cyprus's economy growing?

Cyprus's real GDP grew 3.3% year on year in Q2 2026. The IMF's October 2026 World Economic Outlook forecasts growth of 2.9% in 2026 and 3.2% in 2027.

What is the unemployment rate in Cyprus?

Cyprus's unemployment rate was 4.0% in September 2026, unchanged from August 2026.

What is Cyprus's 10-year government bond yield?

Cyprus's 10-year government bond yield averaged 3.92% in September 2026.

How much government debt does Cyprus have?

Cyprus's government debt is about 52.3% of GDP (latest annual figure), with a budget surplus of 3.6% of GDP.

What is Cyprus's credit rating?

Cyprus's sovereign credit ratings: S&P A, Moody's A3, Fitch A-.

What is the VAT rate in Cyprus?

Cyprus's standard VAT rate is 19% (2026 rules).

What is the corporate tax rate in Cyprus?

Cyprus's corporate income tax rate is 15.0% (2026 rules).

Who leads Cyprus?

Cyprus is led by President Nikos Christodoulides (head of state and government, independent, in office since 28 Feb 2023). Next election: Presidential election due in 2028 (February); next parliamentary election 2031.

Outlook

Growth should stay well above the euro-area average. The IMF (Oct 2026) projects 2.9% in 2026 and 3.2% in 2027, the Finance Ministry 3.1% and 2.9%, and S&P an average just under 3% through 2029, supported by IT and services exports, EU recovery funds and FDI. The main downside risks are a longer Middle East war hitting tourism and energy prices, and HICP inflation that hit 5.2% in August-September, which squeezes real incomes as the ECB tightens. The large current-account deficit (around 7-9% of GDP) is a further vulnerability. On the upside, further rating upgrades are possible (Fitch reviews on 6 Nov, Moody's on 20 Nov), and continued surpluses near 3-4% of GDP should push public debt toward about 45% of GDP by end-2027.

Why Cyprus matters for the world economy

Cyprus is small, but it is a node for shipping and finance in the eastern Mediterranean. Limassol is one of Europe's largest ship-management centres, and the island hosts many internationally owned holding, fund and IT-services companies, so its tax and sanctions enforcement matters to Russian, Israeli, Greek and Gulf capital. Its location next to Israel, Lebanon and Syria makes it a natural logistics and evacuation hub for the region, and also exposes its tourism and air links to the current Middle East war. Offshore gas fields (Aphrodite, Cronos) and the planned Great Sea electricity interconnector with Greece tie it to EU energy diversification. The economies most exposed are Greece (banking, trade and the cable project), the UK and Israel (tourism and investment), and Lebanon (fuel and goods re-exports).

Politics

In the 24 May 2026 parliamentary election, the centre-right DISY (17 of 56 seats) and the leftist AKEL (15) held their ground. The nationalist ELAM doubled to 8 seats, and two new anti-establishment parties, ALMA and Direct Democracy, took 4 seats each. The centrist parties that originally backed President Christodoulides were squeezed, so his government now has to assemble issue-by-issue majorities. Annita Demetriou (DISY) was re-elected Speaker on 4 June. Fiscal policy remains conservative. The €14.4bn 2027 budget presented on 12 October targets a surplus of around 4% of GDP and continued debt paydown, while more than doubling defence outlays. This record underpinned S&P's move back to the A category in September.

System: Unitary presidential republic (euro-area member; northern third under Turkish Cypriot administration, recognised only by Turkey).

Economy and taxes

GDP: US$41 billion
Population: 1.0 million
Government debt: 52.3% of GDP
Budget balance: 3.6% of GDP
Current account: −8.8% of GDP
Main exports: Services dominate: tourism, shipping and ship management, financial, professional and ICT services. Goods: pharmaceuticals, food (halloumi, citrus, potatoes), cement, and re-exports of fuels and ships
Top export markets: Hong Kong (9.8%), Greece (9.6%), Lebanon (6.7%), United Kingdom (5.6%), Liberia (5.2%)
IMF growth forecast: 2.9% in 2026, 3.2% in 2027
IMF inflation forecast: 3.7% in 2026, 1.9% in 2027
Currency: EUR
Freelancer tax: A self-employed person earning the average wage (EUR 31,092 a year) pays about 22.4% of it in income tax and social contributions (2026 rules)
Top income tax rate: 35.0%
Gold reserves: 13.9 tonnes (July 2026)
Energy self-sufficiency: 5% (2024)

Recent news

4 November 2026 Cypriot inflation rises to 5.4%, well above the euro-area average Cyprus Mail
Eurostat's flash estimate put Cyprus's annual inflation at 5.4% in October, up from 5.2% and 1.4 points above the euro area's 4.0%. Finance Minister Keravnos said the energy crisis will keep pushing prices up while it lasts.
4 November 2026 Cyprus plans to extend its fuel tax cut until March 2027 Cyprus Mail
Finance Minister Keravnos will ask the cabinet to renew the reduced excise duty on motor fuels, due to expire at the end of November, possibly until March 2027. The government is also awaiting the Commission's reply on a further cut to the duty on heating oil.
26 October 2026 Eni signs $1.8bn of contracts to develop Cyprus's Kronos gas field Cyprus Mail
Eni awarded deals for subsea equipment, pipelines and a drilling rig to bring gas from the Kronos field in Block 6 to Egypt for liquefaction and export, with first sales hoped for in 2028. President Christodoulides called it a decisive step for the economy.
26 October 2026 Cypriot wages rise about 3%, but one in three employees earns under €1,500 Cyprus Mail
Provisional CYSTAT figures put average gross monthly earnings at €2,548 in Q2 2026, up from €2,475 a year earlier. A third of employees earn less than €1,500, and women earn about 13% less than men on average, though the gap narrowed.
13 October 2026 IMF lowers Cyprus 2026 growth call slightly but sees faster 2027 Cyprus Mail
The October WEO puts Cypriot growth at 2.9% this year and 3.2% next, and raises its 2026 inflation forecast to 3.7% from 2.6% because of energy and food prices. Its 2026 projection is below the Finance Ministry's 3.1%.
12 October 2026 Keravnos tables €14.4bn 2027 budget with big surplus and higher defence spending Cyprus Mail
The finance minister told the House that spending will rise about 5% next year while the budget still targets a surplus of roughly 4% of GDP and debt of about 45% of GDP by end-2027. Defence allocations more than double to about €430m.

Headlines and summaries are compiled daily from the linked reports with AI assistance.