Nicosia, Cyprus. Cyprus’s public debt fell in 2025 to its lowest percentage of GDP since 2008, while the country recorded its fourth consecutive fiscal surplus, according to preliminary data from the statistical service.
President Nikos Christodoulides said on X on Friday that the debt ratio fell as a result of what he described as responsible fiscal policy, adding that the development was particularly important given the current geopolitical situation.
Fiscal surplus in 2025
Preliminary data published by the statistical service (Cystat) on March 3 showed a fiscal surplus of €939.2 million in 2025, equivalent to 2.6 per cent of GDP. This compared with a surplus of €1.44 billion, or 4.1 per cent of GDP, in 2024.
The 2025 result marked the fourth consecutive year of fiscal surplus and was the second-best fiscal performance of the past 17 years, behind only 2024. It was slightly below the 2.7 per cent of GDP recorded in 2022.
Debt projections and recent trend
The improvement came in better than expected. Around September last year, public debt had been projected at about 57 per cent of GDP, after earlier forecasts had pointed to a fall below 60 per cent of GDP only around the end of 2026.
The development follows a prolonged fiscal adjustment. After persistent deficits began in 2009, public debt rose from 59.3 per cent of GDP in 2010 to 112.7 per cent in 2014.
A return to surplus began in 2016 and strengthened in 2017, before the collapse of the Cooperative and the pandemic pushed public finances back into deficit, sending the debt ratio to a record 113.6 per cent in 2020.
Since then, the steady recovery of the economy and continued surpluses have allowed for a rapid reduction in public debt.
What do you think is the most important factor behind Cyprus’s recent reduction in public debt?