Nicosia, Cyprus. Cyprus’ economic growth rate is expected to remain broadly stable in the coming years, according to the University of Cyprus’ Economics Research Centre’s January outlook. The centre forecasts growth of 3.5% in 2026 and 3.4% in 2027.
Growth forecasts and revisions
The centre estimated that real GDP growth slowed from 3.9% in 2024 to 3.5% in 2025. It projects growth to remain broadly stable at 3.5% in 2026 and 3.4% in 2027.
The centre said its forecasts for 2025 and 2026 were unchanged compared with the October issue.
Domestic factors
The centre said the favourable outlook mainly reflects positive domestic developments during 2025, including a strong labour market, easing inflation, high economic confidence, and an increase in new lending supported by lower interest rates.
External environment
Despite heightened global uncertainty and volatility in international markets during 2025, the centre cited external support from steady, though somewhat subdued, growth rates in the economies of Cyprus’ trade partners. It also pointed to strong performance in international equity markets as an indication of resilience in global economic prospects.
Inflation outlook
Inflation based on the consumer price index is forecast to rise from 0.1% in 2025 to 0.8% in 2026 and 1.4% in 2027.
Which of the forecast drivers—domestic conditions or external factors—do you expect to have the biggest impact on Cyprus’ growth through 2027?