The growth rate of the Cypriot economy in 2026 is estimated to be 3.1%, despite the significant challenges facing the global economy due to the ongoing Russia–Ukraine war and the conflict in the Middle East. For the period 2027–2029, the growth rate is expected to remain at relatively high levels, around 3%, according to Finance Minister Makis Keravnos, who presented the 2027 state budget to the Parliamentary Finance Committee on Monday.
Regarding inflation, he noted that it is projected to be 4% in 2026, falling to 2.5% in 2027 and to 2% in 2028 and 2029, with the unemployment rate at 3.8%. Regarding the budget surplus, it is expected that in 2026 the budget balance (General Government) will remain in surplus and rise to 2.7% of GDP, while in 2027 it is projected to improve further and reach 3.9% of GDP. With regard to public debt, a significant reduction in public debt as a percentage of GDP is expected in 2026—by 6.1 percentage points—and in 2027, it is projected to stand at 46.6% of GDP, down from the current 48.9%, and the forecast for a steady downward trend in the medium term is confirmed.
ΣΧΕΤΙΚΑ ΑΡΘΡΑ
With regard to banks, he noted that there is an upward trend in deposits, which is due to deposit inflows from both households and businesses.
Deposit inflows from domestic corporate depositors outside the financial sector recorded a slight increase. An upward trend has also been observed in total loans from Cypriot banks since 2023, with an increased flow of lending.
Furthermore, the banking sector’s strong capital base is being maintained, and its resilience is being strengthened, while credit institutions maintain high levels of liquidity.
The Minister of Finance stated that the 2027 budget was drafted with the aim of maintaining a fiscal surplus, continuing to reduce public debt, promote the green transition, maintaining public-sector employment, and preserving a robust financial system, so that potential risks do not pose a threat to public finances.
Source: CNA
