The Cypriot economy is set to maintain one of Europe’s highest growth rates despite regional instability and oversight measures being imposed on major European nations, President Nikos Christodoulides announced whilst presenting the Annual Governance Programme for 2025.
“In 2025, we are building upon progress and continuing with the same sense of responsibility”, the President stated. This year marks a milestone for Tax Reform, which will enter public consultation in February. The reform aims to increase household disposable income and support Cypriot business development. For households, tax relief will substantially strengthen the middle class, helping address housing and demographic challenges. For Cypriot businesses, the President announced tax burden reductions aimed at boosting competitiveness and exports.
The President outlined the implementation of Pension Reform, with the primary goal of ensuring dignified pensions. The reform includes modernising the Social Insurance Fund’s investment policy, strengthening occupational pensions (particularly in the private sector), and upgrading the social security system.
Other key policies for 2025 include:
- Compensation payments for affected bank depositors and bondholders will commence in the first half of 2025
- In partnership with social partners, reforms will be advanced to modernise the Cost of Living Adjustment, extend collective agreements, adjust the minimum wage, and tackle undeclared work
- A campaign to repatriate Cypriot scientists will launch, offering incentives and relocation support
- The first-ever funding for commercial exploitation of innovative technology products and services
- Creation of a Business Service Centre as the first point of contact between investors and the state
The housing sector will receive increased funding of €75 million, including:
- A new scheme offering plots in communities at 25% of market value
- A revised scheme for people under 41 with support up to €50,000
- Updated housing schemes for young displaced persons
The President also outlined plans for primary sector development, tourism enhancement including theme parks and the Paphos Marina, and energy security measures including natural gas development in Cyprus’s EEZ.
