Nicosia, Cyprus. Cyprus continued to outperform most eurozone economies in fiscal balance in 2025, according to analysis by Eurobank research economist Michail Vassileiadis based on preliminary fiscal data and an initial GDP estimate.
The analysis said Cyprus recorded an overall surplus of 2.6% of GDP in 2025 and a primary surplus of 3.7% of GDP, excluding interest payments.
Fourth consecutive year of outperformance
Vassileiadis said Cyprus outperformed most eurozone peers in fiscal balance for a fourth consecutive year, continuing a trend between 2022 and 2024 when the country recorded the highest overall fiscal surplus in the eurozone.
The 2025 figures represented a decline from 2024 peaks of 4.1% of GDP in overall surplus and 5.4% of GDP in primary surplus, but Cyprus still maintained a leading position in the eurozone.
Eurozone rankings and European Commission projections
Based on fiscal balance projections in the European Commission European Economic Forecast of November 2025, the analysis said Cyprus remained the top performer in overall balance terms across the eurozone in 2025.
It also said Cyprus ranked second in the eurozone in primary balance terms, behind Greece.
Policy easing and fiscal drivers
Vassileiadis said the fiscal outcome was notable because elevated fiscal surpluses were achieved despite policy easing on both revenue and expenditure.
The analysis said the reduction in value added tax on electricity introduced in April affected government income, with VAT receipts declining by 1.7% in 2025 compared with a 6.4% increase in 2024.
It also said public sector wages and pensions were increased beyond the standard partial indexation mechanism for the first time since 2009, with public sector wage expenditure rising by 6.5% and pension spending increasing by 7.6%.
What do you think Cyprus’s fiscal results in 2025 indicate about its economic policy direction?
