Finance Minister Makis Keravnos, as particularly encouraging for the progress of the Cypriot economy.
According to the Fund’s estimates, the growth rate of the Cypriot economy is expected to reach 2.9% in 2026 and 3.2% in 2027, with the Minister noting that the forecasts confirm the economy’s resilience despite international uncertainty.
ΣΧΕΤΙΚΑ ΑΡΘΡΑ
In a written statement, Mr. Keravnos also refers to the inflation forecasts, which are estimated at 3.7% for 2026 and 1.9% for 2027, as well as the reduction of public debt to 38.6% of GDP by 2029.
At the same time, the IMF forecasts a fiscal surplus of 2.6% in 2026 and 2.5% in 2027. The Minister attributes the positive outlook to the government’s fiscal policy, emphasizing that the goal remains to strengthen the productivity and competitiveness of the Cypriot economy.
The statement reads as follows
We are pleased to note that the International Monetary Fund’s projections, presented yesterday in the “October 2026 World Economic Outlook on the prospects for the global economy,” are particularly encouraging for the Cypriot economy and follow a series of other forecasts from other international and European organizations, which emphatically confirm the resilience of the Cypriot economy in an environment of heightened uncertainty directly affected by armed conflicts.
According to IMF forecasts, the growth rate of the Cypriot economy for 2026 remains high despite a marginal downward revision of the Fund’s forecast from 3% to 2.9%, due to the impact of the armed conflicts, while it upgraded its forecast for 2027 growth to 3.2%, up from the 3% it had previously estimated. The Ministry of Finance’s corresponding forecast for 2026 remains at 3.1%, based in part on the Statistical Service’s semi-annual results, which show a growth rate of 3.2%. The growth forecasts, despite minor discrepancies among them, keep Cyprus among the highest in the European Union and confirm the sound economic policy pursued by the government of Nikos Christodoulides, which is based on prudent fiscal management, the stability of the financial system, the strengthening of investor confidence, and, above all, the dynamism of Cypriot businesses and workers.
Regarding inflation, driven mainly by the energy crisis, the Fund estimates it will rise to 3.7% in 2026, while it forecasts it will decline to 1.9% in 2027, fully confirming the government’s coordinated and targeted efforts through support packages to mitigate the effects of rising prices and its multifaceted efforts to increase citizens’ income and gradually ease inflationary pressures in the coming years.
The IMF’s projections for unemployment are also very encouraging, as the Fund projects it will fall from 4.6% to 4% in 2026 and from 4.7% to 4.4% in 2027, confirming the sound policies of the government, which have succeeded in ensuring that Cyprus’s economy operates today—and will continue to do so in the future—under conditions of full employment, in contrast to what was the case in the recent past.
We cannot help but note with satisfaction the IMF’s projection of a continued decline in public debt, which the Fund projects will fall to 38.6% by 2029. This is a significant development that will be unprecedented and beneficial for the Cypriot economy.
Finally, the IMF’s projection of a surplus as a percentage of GDP at 2.6% in 2026 and 2.5% in 2027 demonstrates the sound fiscal policy pursued by the government through the generation of surpluses that provide stability to the economy and the necessary flexibility to address emergencies, as well as for implementing sound social policies to provide targeted support to vulnerable groups of citizens.
As a government and as the Ministry of Finance, we will remain committed to the prudent and proactive fiscal policy we are pursuing, which, based on the data and all forecasts from international organizations, strengthens the credibility of our economy and creates the conditions—under full employment—for a more productive, more competitive, and more resilient economy for the benefit of our citizens.
