Economic growth is strong in the third quarter of 2025

GDP growth was well above the EU average in Q3: According to a flash estimate, Cyprus' GDP growth clocked 3.6% in annual terms in Q3, following a 3.6% expansion in the prior quarter. For comparison, the EU average rate was just 1.6%, with only Ireland and Poland recording fastest expansions than Cyprus among the bloc’s member states. On a working day and seasonally adjusted quarter-on-quarter basis, GDP increased 0.9% in Q3, following 0.7% growth in the prior quarter.

Trade and hospitality once again drive growth: The statistical office said that year-on-year GDP growth was driven by the domestic trade, hospitality, and information and communication subsectors. Moreover, available Q3 data on the external sector shows that merchandise exports rebounded after declining in Q2, and that tourist arrivals continued to grow at a healthy pace. A full breakdown of the GDP figures will be published on 1 December.

Economy to lose steam in 2026 but to beat euro area average: Our panelists expect GDP growth to lose steam in 2026 from 2025 due to weaker growth in both domestic demand and exports. Nonetheless, the economy will remain one of the fastest-growing in the euro area, backed by strong tourism. The health of the EU economy—Cyprus’ key trade partner and main source of tourism—is a key factor to watch.

How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Cypriot government consumption projections for the next ten years from a panel of 4 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable government consumption forecast available for Cypriot government consumption.

Download one of our sample reports to visualize what a Consensus Forecast is and see our Cypriot government consumption projections.

Want to get access to the full dataset of Cypriot government consumption forecasts? Send an email to info@focus-economics.com.