Cyprus’s economy continues to show robust growth while major European economies flirt with recession, maintaining a growth rate several times higher than the European average, new Eurostat data shows.
The island’s GDP grew by 3.8 percent year-on-year in the third quarter of 2024, compared to the eurozone’s 0.9 percent.
Quarter-on-quarter growth reached 1 percent, outperforming the eurozone’s 0.4 percent increase.
The strong performance comes as Europe’s largest economies face economic headwinds.
Germany’s economy stagnated with 0.1 percent quarterly growth and contracted by 0.3 percent year-on-year, whilst France recorded modest growth of 0.4 percent.
Other EU members including Latvia, Estonia, and Austria saw their economies shrink by 1 percent, 0.6 percent, and 0.8 percent respectively.
Malta led the EU with 5 percent annual growth, followed by Croatia at 4.1 percent, Denmark at 3.9 percent, Cyprus at 3.8 percent, and Spain at 3.4 percent.
Greece’s economy expanded by 2.4 percent year-on-year and 0.3 percent quarter-on-quarter.
Cyprus’s 2025 budget and Stability Programme forecasts real GDP growth of 2.9 percent in 2024, rising to 3.1 percent in 2025, 3.2 percent in 2026, and 3.3 percent in 2027.
The Central Bank of Cyprus projects higher growth of 3.5 percent for 2024, up from 2.5 percent in 2023, followed by 3.1 percent and 3.2 percent in 2025 and 2026 respectively, driven primarily by domestic demand and to a lesser extent external demand.
The eurozone’s economic clouds have sparked speculation about the European Central Bank’s upcoming rate decision.
While French central banker François Villeroy de Gallo and Portugal’s Mario Centeno have signalled openness to a 0.5 percent cut, most officials favour a gradual 0.25 percent reduction.
Bloomberg analysts expect a 25-basis-point cut at next week’s meeting, with similar reductions anticipated through June.
Political turbulence in Germany and France, ongoing conflicts in Ukraine and the Middle East, and Donald Trump’s trade tariff threats are heightening economic risks.
Even ECB hawk Robert Holzmann described a 25-basis-point cut as “understandable” for the next meeting, though he opposed larger reductions.
Traders are betting on a fourth consecutive 25-basis-point cut as the most likely scenario.
