Hotels, restaurants, wholesale and retail trade, vehicle repair, and communications are key sectors driving economic growth. They helped keep the growth rate above 3.5% in the third quarter of 2025. The real GDP for this quarter hit €7,645.9 million, showing an annual change of 3.6%.
Another important aspect is that no sector faced negative change or stagnation compared to last year. The Statistical Service announced yesterday that the real GDP growth rate (seasonally adjusted) for the third quarter of 2025 is positive at 3.6%, compared to the same quarter in 2024.
This positive GDP trend boosts hopes for steady growth in the second half of 2025, even with external pressures mainly from geopolitical issues. IMF forecasts predict Cyprus’s growth rate will be 2.9% this year and 2.8% for 2026. Meanwhile, the Ministry of Finance expects growth at 3.2% this year and 3.1% for 2026. The European Commission has raised its forecast for the 2025 growth rate by 0.4 percentage points (to 3.4% from 3.0%) and for 2026 by 0.1 percentage point (to 2.6% from 2.5%). Notably, Cyprus is set to have the third-highest growth rate in the Eurozone in 2025, following Ireland and Malta.
Which sectors are fueling growth and how do they contribute to GDP? Data shows that wholesale and retail trade, vehicle repair, transport and storage, along with accommodation and food services contributed €1.54 billion to GDP in the third quarter of 2025, marking an annual change of 6.5%.
The second expanded sector includes public administration, defense, social security, education, health, and social work activities, contributing €1.21 billion in the third quarter with an annual change of 1.4%.
Information and communication generated €904 million in GDP, with an annual increase of 8.4% in the third quarter. Professional, scientific, and technical activities, along with administrative support activities contributed €645.7 million in this quarter, showing an annual change of 1.6%. Real estate management added €668 million, with a rise of 2.1%.
The other sectors contributed to GDP in the third quarter of 2025 as follows:
- Mining and quarrying; electricity, gas, steam and air conditioning supply; water supply; sewerage; waste management: €445 million.
- Manufacturing: €326.3 million.
- Construction: €366.1 million.
- Arts, entertainment and recreation; household goods repair; other services: €243.1 million.
Agriculture had the smallest contribution to GDP at €82 million in the third quarter of 2025, showing an annual change of 0.8%.
Total final consumption expenditure reached €5,970.9 million, rising by 4.7% annually. According to Statistical Service data, household consumption and non-profit institutions serving households increased by 5.4%, while government consumption rose by 2.5%.
Gross fixed capital formation fell by 2.6%, while gross fixed capital formation excluding ships and aircraft grew by 7.4%. Exports of goods and services hit €8,194.4 million, up by 6.7%, while imports reached €7,897.4 million, increasing by 8%.
