IMF lifts Cyprus growth forecast for 2027 to 3.2 per cent

Nicosia, Cyprus. The International Monetary Fund (IMF) has increased its forecast for Cyprus’s economic growth in 2027 to 3.2 per cent from 3 per cent. Finance Minister Makis Keravnos welcomed the revision on Thursday, saying it demonstrated the economy’s resilience amid persistent global uncertainty.

Growth projections diverge for 2026

In its October 2026 World Economic Outlook, the IMF trimmed its growth estimate for 2026 to 2.9 per cent from 3 per cent, citing the effects of continuing conflicts.

The Finance Ministry has retained its forecast of 3.1 per cent for 2026, supported by data from the statistical service, Cystat, which recorded growth of 3.2 per cent over the year’s first half.

Keravnos said in a statement that the IMF projections followed comparable assessments from European and international institutions. He said these assessments “emphatically confirm the resilience of the Cypriot economy” under pressure from international developments.

Despite modest differences between the forecasts, he said, Cyprus remained among the EU’s better-performing economies. He attributed that performance to prudent management of public finances, financial stability, and the contributions of businesses and workers in Cyprus.

Inflation expected to ease in 2027

The IMF projects consumer price inflation of 3.7 per cent for 2026, driven primarily by the energy crisis, followed by a decline to 1.9 per cent in 2027.

Keravnos linked the anticipated easing to government action to reduce living-cost pressures through targeted assistance and policies intended to raise household incomes.

Lower unemployment and debt forecasts

The Fund reduced its unemployment projection for 2026 to 4 per cent from 4.6 per cent. For 2027, it now expects 4.4 per cent, compared with its earlier estimate of 4.7 per cent.

The minister said those revisions reflected government policies that had helped bring Cyprus to full-employment conditions.

The IMF also projects that public debt will decline to 38.6 per cent of GDP by 2029. Keravnos described that prospect as “unprecedented and beneficial for the Cypriot economy”.