Cyprus Economy: 2025 Results and 2026 Outlook

## Introduction
In 2025, Cyprus's economy demonstrated robust growth, outpacing Eurozone averages. Diversification of the economy and investment influx created a solid foundation for 2026.
## 2025 Performance
**GDP Growth:** +2.8% (Eurozone avg: +1.1%)
**Key Drivers:** Tourism recovery (16% of GDP), professional services (19% of GDP), real estate/construction (12% of GDP)
**Unemployment:** 5.9% (down from 6.4% in 2024)
**Inflation:** 2.3% (within ECB target of 2% ±1%)
## Financial Sector
Despite tax reform, Cyprus retained competitiveness with:
- Low bureaucracy
- EU membership benefits
- Offshore company restructuring support
- Well-developed banking
## 2026 Forecast
**IMF Projections:** GDP growth +2.3-2.5%
**Key Factors:** Continued tourism growth, admin reform implementation, infrastructure investment (€500M+ committed)
**Challenges:** Geopolitical tensions, ECB policy dependency
**Overall:** Stable growth with controlled inflation makes Cyprus attractive for investors and relocation.