Nicosia: The International Monetary Fund (IMF) has revised its growth forecast for Cyprus, predicting a deceleration in economic expansion to 2.5% in 2025, down from an earlier projection of 3.1%. The anticipated growth rate for 2026 has also been adjusted to 2.7%.
According to Cyprus News Agency, this revised forecast contrasts with the estimates provided by the Ministry of Finance, which, in its 2025 budget, forecasts a growth rate of 3.1% for 2025 and 3.2% for 2026. The IMF’s April World Economic Outlook attributes the global economic slowdown to a sharp increase in tariffs and growing uncertainty.
The IMF’s updated estimates indicate that inflation in Cyprus will stabilize at 2.3% in 2025, consistent with the rate in 2024 but higher than the previous projection of 2% made in October. Inflation is expected to ease to 2% by 2026.
The IMF has offered a more positive outlook on Cyprus’ current account balance, projecting a reduced deficit of 7.3% of GDP for 2025, down from the October estimate of 8.3%.
In terms of employment, the IMF’s latest projections show an improvement in the unemployment rate. It is expected to decrease to 4.8% in 2025, compared to the previous forecast of 5.1%, with a slight rise to 5% projected for 2026.