For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.
Cyprus is an open free-market economy mainly based on services. After being severely hit by the global financial crisis and the exposure of the national banking system, the country's economy recovered in recent years, thanks to domestic demand and tourism, until the abrupt halt caused by the COVID-19 pandemic. Nevertheless, Cyprus’ GDP returned to its pre-pandemic level already in 2021, with continued growth in 2022 when robust private consumption, the revival of the tourism sector and increased services exports contributed to a 3.5% growth (data IMF; 5.8% according to the EU Commission estimates). A 50% wage indexation was implemented in January 2023 and is expected to support private consumption over the course of the year, with the IMF forecasting growth at 2.5% on the back of a full recovery of the tourism sector (although rising interest rates are set to negatively affect corporate investments and residential construction). The growth rate should remain relatively stable in 2024, at 2.6%.
Concerning public finances, Cyprus’ recorded a general government budget surplus of EUR 587 million (2.2% of GD) during the first nine months of 2022, compared to a deficit of EUR 453.3 million in the corresponding period one year earlier, thanks to a EUR 1.15 billion in revenues (+16.2% - data Statistics Cyprus). The 2023 budget provides for general government expenditures of EUR 11.29 billion and revenues of EUR 11.76 billion, projecting a surplus at around 1.7% of GDP (although the IMF projections are more conservative, at 0.7%). The public debt-to-GDP ratio – at 93.6% in 2022 – has been helped by the continued economic expansion and is expected to follow a downward trend over the forecast horizon, decreasing to 80.2% by 2024. Inflation reached 8% in 2022 fuelled by high energy prices and supply bottlenecks. As falling gas and oil prices ease energy inflation and supply disruptions attenuate further, the IMF sees the inflation rate returning closer to the target, at 3.8% this year and 2.1% in 2024, although wage indexation may exert some upward pressure on core inflation.
The unemployment rate stood at 6.1% in 2022 (from 7.5% one year earlier), and is expected to gradually decrease in 2023 and 2024 on the back of the economic expansion and the implementation of the EU’s RRP (to 6.5% and 6.3%, respectively – IMF). In recent years, a strong focus on the service and skilled industry, along with industrial and agricultural growth, has allowed the country to improve its already high standard of living; however, 17.3% of the population is at risk of poverty or social exclusion (below the EU average of 21.7% - Eurostat). Overall, the IMF estimated Cyprus’ GDP per capita (PPP) at USD 49,504 in 2022.
|Main Indicators||2020||2021||2022 (E)||2023 (E)||2024 (E)|
|GDP (billions USD)||24.99||28.43||28.47||30.86||32.34|
|GDP (Constant Prices, Annual % Change)||-4.4||6.6||5.6||2.5||2.8|
|GDP per Capita (USD)||28,140||31,726||31,466||33,807||35,104|
|General Government Balance (in % of GDP)||-3.8||-1.3||1.3||1.3||1.2|
|General Government Gross Debt (in % of GDP)||113.5||101.1||86.5||79.6||71.9|
|Inflation Rate (%)||-1.1||2.2||8.1||3.9||2.5|
|Unemployment Rate (% of the Labour Force)||7.6||7.5||6.7||6.5||6.2|
|Current Account (billions USD)||-2.51||-1.94||-2.51||-2.42||-2.34|
|Current Account (in % of GDP)||-10.1||-6.8||-8.8||-7.8||-7.2|
Source: IMF – World Economic Outlook Database , Latest available data
Note: (e) Estimated Data
In the past two decades, the basis of the Cypriot economy has shifted from agriculture to light manufacturing and, most importantly, services. Nowadays, the agricultural sector contributes around 1.7% of GDP and employs 2% of the active population (World Bank, latest data available). Agricultural sector suffers from a very dry climate, and only 13% of the land is arable (125,000 ha - FAO). The main crops are wine grapes, potatoes and fruits. Mineral resources are limited and include mostly copper, pyrites, chrome, asbestos and gypsum.
Industry (mainly industrial food-processing, paper, chemical products, textiles, metal products and petroleum refining) accounts for 13.1% of GDP (including construction) and employs around 18% of the active population. The government aims to double the industry's share of GDP by 2030. The manufacturing sector is not very developed and is estimated to account for nearly 6% of GDP (World Bank, latest data available). According to figures from Statistics Cyprus, the annual average variation of industrial production in the period January-November 2022 stood at an estimated +1.7%.
Cyprus’ economy is mostly based on the tertiary sector, which contributes 73.2% of the GDP and employs 79% of the active population. Tourism and maritime transportation are considered to be the two pillars of the Cypriot economy. After recording an all-time record of tourists in 2019 (almost 4 million), the number of arrivals was almost halved in 2021 amid the COVID-19 pandemic crisis. Nevertheless, the sector recovered in 2022, when the country welcomed 3.2 million tourists (+65% y-o-y and 80% of the pre-pandemic level - Cystat). Cyprus has the eleventh-largest shipping fleet in the world and the third-largest in the European Union. However, offshore activities are often led by foreign-capital companies based in Cyprus, whose commercial activities are executed exclusively outside the country. This system enables them to enjoy substantial tax benefits. Finance and real estate have traditionally been among the most important services. As per the banking sector, there are 29 authorised credit institutions in Cyprus, consisting of six local institutions, three subsidiaries of EU banks, one subsidiary of a foreign bank from a non-EU country, five branches of banks from EU Member States, 13 branches of banks from non-EU Member States and one representative office (EBF).
|Breakdown of Economic Activity By Sector||Agriculture||Industry||Services|
|Employment By Sector (in % of Total Employment)||2.4||18.4||79.2|
|Value Added (in % of GDP)||1.7||13.1||73.2|
|Value Added (Annual % Change)||0.1||8.1||6.2|
Source: World Bank - Latest available data.
Find more information about your business sector on our service Market Reports.
|Euro (EUR) - Average Annual Exchange Rate For 1 MUR||0.03||0.03||0.02||0.03||0.02|
Source: World Bank - Latest available data.
Find out all the exchange rates daily on our service Currency Converter.
The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.
The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.
The geographical location of Cyprus (being a bridge between West and East), along with its good airlines and telecommunications infrastructure, has enabled the country to turn itself into an important regional and international business centre. The country's foreign trade represents 170% of GDP (World Bank) and is mainly oriented towards the EU. Cyprus’ main exports include mineral fuels and oils (29.5%), pharmaceutical products (19.7%), halloumi cheese (17.2%), waste and scrap of paper, glass and metal (5.2% - Statistics Cyprus); with imports being led by petroleum oils (14.7%), cruise ships and boats (7%), motor cars (4.4%), and medicaments (3.4%).
The main destinations for Cyprus’ exports in 2021 were Lebanon (8.7%), Greece (7.7%), the Marshall Islands (7.6%), the United Kingdom (6.5%) and the British Virgin Islands (6.1%); while imports came chiefly from Greece (23.9%), Italy (10.2%), Germany (6.2%), the Netherlands (5.1%), and China (5% - Comtrade).
Cyprus' trade balance is traditionally in deficit because the country has to import extensively in order to satisfy domestic demand (particularly, for energy supplies); in 2021, the country’s trade balance was negative by 2.9% of GDP, according to data from the World Bank. In fact, although Cyprus is a net service exporter - with a total value of exports of USD 18.2 billion (mostly travel, shipping and banking) against USD 12.8 billion in imports – such surplus was offset by the trade in goods (USD 10.1 billion of imports vis-à-vis 3.7 billion in exports). According to the provisional 2022 data from CyStat, total goods imports amounted to EUR 11.2 billion (+29.5% vis-à-vis one year earlier), whereas exports totalled EUR 4.1 billion (marking an increase of 23.8%). The overall trade deficit was EUR 7 billion compared to EUR 5.27 billion in 2021.
|Foreign Trade Indicators||2017||2018||2019||2020||2021|
|Imports of Goods (million USD)||9,231||10,815||9,127||8,598||10,168|
|Exports of Goods (million USD)||3,288||5,052||3,453||3,057||3,787|
|Imports of Services (million USD)||6,748||8,868||9,474||9,361||12,839|
|Exports of Services (million USD)||11,295||14,482||14,277||12,563||18,212|
|Imports of Goods and Services (Annual % Change)||14.3||4.3||9.5||3.2||9.0|
|Exports of Goods and Services (Annual % Change)||11.0||7.2||8.7||2.2||13.6|
|Imports of Goods and Services (in % of GDP)||74.2||73.6||75.5||82.8||83.7|
|Exports of Goods and Services (in % of GDP)||73.8||75.0||76.5||81.4||86.6|
|Trade Balance (million USD)||-5,633||-5,303||-5,180||-4,842||-5,120|
|Trade Balance (Including Service) (million USD)||-93||366||260||-332||803|
|Foreign Trade (in % of GDP)||148.0||148.5||152.0||164.2||170.3|
Source: WTO – World Trade Organisation ; World Bank , Latest Available Data
(% of Exports)
|Hong Kong SAR, China||10.7%|
|See More Countries||63.4%|
(% of Imports)
|See More Countries||45.4%|
Source: Comtrade, Latest Available Data
|4.4 bn USD of products exported in 2022|
|Cruise ships, excursion boats, ferry-boats, cargo...Cruise ships, excursion boats, ferry-boats, cargo ships, barges and similar vessels for the transport of persons or goods||29.9%|
|Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals||20.2%|
|Medicaments consisting of mixed or unmixed...Medicaments consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses "incl. those in the form of transdermal administration" or in forms or packings for retail sale (excl. goods of heading 3002, 3005 or 3006)||8.9%|
|Cheese and curdCheese and curd||6.9%|
|Mixtures of odoriferous substances and mixtures,...Mixtures of odoriferous substances and mixtures, incl. alcoholic solutions, based on one or more of these substances, of a kind used as raw materials in industry; other preparations based on odoriferous substances, of a kind used for the manufacture of beverages||2.5%|
|See More Products||31.7%|
|11.9 bn USD of products imported in 2022|
|Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals||19.0%|
|Cruise ships, excursion boats, ferry-boats, cargo...Cruise ships, excursion boats, ferry-boats, cargo ships, barges and similar vessels for the transport of persons or goods||7.7%|
|Motor cars and other motor vehicles principally...Motor cars and other motor vehicles principally designed for the transport of persons, incl. station wagons and racing cars (excl. motor vehicles of heading 8702)||4.1%|
|Oils and other products of the distillation of...Oils and other products of the distillation of high temperature coal tar; similar products in which the weight of the aromatic constituents exceeds that of the non-aromatic constituents||3.4%|
|Medicaments consisting of mixed or unmixed...Medicaments consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses "incl. those in the form of transdermal administration" or in forms or packings for retail sale (excl. goods of heading 3002, 3005 or 3006)||3.1%|
|See More Products||62.7%|
Source: Comtrade, Latest Available Data
To go further, check out our service Import Export Flows.
|16.7 bn USD of services exported in 2020|
|Information servicesInformation services||0.02%|
|Sea transportSea transport||21.55%|
|Air transportAir transport||0.60%|
|Miscellaneous business,...Miscellaneous business, professional, and technical services||8.23%|
|Advertising, market research,...Advertising, market research, and public opinion polling||5.64%|
|Legal, accounting, management...Legal, accounting, management consulting, and public relations||1.54%|
|Accounting, auditing,...Accounting, auditing, bookkeeping, and tax consulting services||0.94%|
|Business and management...Business and management consulting and public relations services||0.37%|
|Legal servicesLegal services||0.23%|
|Research and developmentResearch and development||0.16%|
|Merchanting and other trade-related...Merchanting and other trade-related services||0.56%|
|Other trade-related servicesOther trade-related services||0.56%|
|Operational leasing servicesOperational leasing services||0.02%|
|Personal travelPersonal travel||3.95%|
|Education-related expenditureEducation-related expenditure||1.05%|
|Health-related expenditureHealth-related expenditure||0.05%|
|Business travelBusiness travel||0.42%|
|Franchises and similar rightsFranchises and similar rights||1.59%|
|Other direct insuranceOther direct insurance||0.60%|
|Telecommunications servicesTelecommunications services||0.73%|
|Construction in the compiling...Construction in the compiling economy||0.02%|
|Construction abroadConstruction abroad||0.01%|
|10.0 bn USD of services imported in 2020|
|Information servicesInformation services||0.08%|
|Other information provision...Other information provision services||0.08%|
|Sea transportSea transport||19.05%|
|Miscellaneous business,...Miscellaneous business, professional, and technical services||16.94%|
|Advertising, market research,...Advertising, market research, and public opinion polling||12.86%|
|Research and developmentResearch and development||3.01%|
|Legal, accounting, management...Legal, accounting, management consulting, and public relations||1.91%|
|Business and management...Business and management consulting and public relations services||1.43%|
|Accounting, auditing,...Accounting, auditing, bookkeeping, and tax consulting services||0.24%|
|Legal servicesLegal services||0.24%|
|Agricultural, mining, and...Agricultural, mining, and on-site processing services||1.01%|
|Other business servicesOther business services||0.95%|
|Architectural, engineering,...Architectural, engineering, and other technical services||0.09%|
|Merchanting and other trade-related...Merchanting and other trade-related services||0.57%|
|Other trade-related servicesOther trade-related services||0.57%|
|Operational leasing servicesOperational leasing services||0.06%|
|Personal travelPersonal travel||7.04%|
|Education-related expenditureEducation-related expenditure||3.54%|
|Health-related expenditureHealth-related expenditure||0.46%|
|Business travelBusiness travel||0.54%|
|Franchises and similar rightsFranchises and similar rights||1.83%|
|Other direct insuranceOther direct insurance||0.81%|
|Freight insuranceFreight insurance||0.38%|
|Life insurance and pension fundingLife insurance and pension funding||0.05%|
|Telecommunications servicesTelecommunications services||2.58%|
|Other personal, cultural, and...Other personal, cultural, and recreational services||1.16%|
|Health servicesHealth services||0.01%|
|Audiovisual and related servicesAudiovisual and related services||0.11%|
|Embassies and consulatesEmbassies and consulates||0.37%|
|Construction in the compiling...Construction in the compiling economy||0.01%|
|Construction abroadConstruction abroad||0.01%|
Source: United Nations Statistics Division, Latest Available Data
Following the latest legislative elections, the composition of the Parliament is as follows:
- Democratic Rally (Disy): right-wing, absorbed the Liberals in 1998 (17 seats)
- Progressive Party of the Working People (Akel): left-wing, communist (15 seats)
- Democratic Party (Diko): centrist (9 seats)
- National Popular Front (Elam): far right, nationalist (4 seats)
- Movement of Social Democrats (Edek): centre-left, formerly known as Social Democratic Movement (Kisos) (3 seats)
- Democratic Front: centre, liberal (4 seats)
- Ecologists Movement (KOSP): centre-left, green (3 seats)
- Citizens' Alliance (SYPOL): centre, centre-left (1 seat).
The world rankings, published annually, measures violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).
The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.
To find out about the latest public health situation in Cyprus and the current sanitary measures in vigour, please consult the official governmental portal on COVID-19, including the up-to-date information on the containment measures put in place and public health recommendations. The portal also provides the guidelines for citizens (in Greek). The latest guidelines and instructions on movement restrictions and exemptions can be downloaded here.
Regularly updated travel information for all countries with regards to Covid-19 related entry regulations, flight bans, test requirements and quarantine is available on TravelDoc Infopage.
It is also highly recommended to consult COVID-19 Travel Regulations Map provided and updated on the daily basis by IATA.
The UK Foreign travel advice also provides comprehensive travelling abroad advice for all countries, including the latest information on health, safety, security, entry requirements and travel warnings.
To know about the economic measures taken by the Cypriot government to address the impact of the COVID-19 pandemic on the national economy, please visit the website of the Ministry of Labour, Welfare and Social Insurance (MLWSI).
For an overview of the Cyprus Government measures in response to COVID-19.measures, refer to the KPMG website.
The information on the EU’s economic response to COVID-19 and the actions to minimise the fallout on the EU member states’ economies of the COVID-19 outbreak is available on the website of the European Council.
For the general overview of the key economic policy responses to the COVID-19 outbreak (fiscal, monetary and macroeconomic) taken by the Cypriot government to limit the socio-economic impact of the COVID-19 pandemic, please consult the section dedicated to Cyprus in the IMF’s Policy Tracker platform.
For a general overview of international SME support policy responses to the COVID-19 outbreak refer to the OECD's SME Covid-19 Policy Responses document.
You can also consult the World Bank's Map of SME-Support Measures in Response to COVID-19.
Any Comment About This Content? Report It to Us.
© eexpand, All Rights Reserved.
Latest Update: September 2023