Cyprus records one of the highest GDP growth rates in the EU

Cyprus has emerged as one of the top economic performers in the European Union during the final months of last year, according to the latest data from the bloc’s statistical office.

Cyprus recorded a 1.4 per cent increase in its Gross Domestic Product during the fourth quarter of 2025 compared with the previous three-month period, Eurostat reported on Friday.

This performance placed the Republic of Cyprus alongside Croatia with the third-highest growth rate in the European Union, surpassed only by Malta at 2.1 per cent and Lithuania at 1.7 per cent.

On a broader scale, seasonally adjusted GDP increased by 0.2 per cent in both the euro area and the EU during the fourth quarter of 2025 when compared with the previous quarter.

These figures represent a slight cooling of momentum following the third quarter of 2025, when GDP had increased by 0.3 per cent in the euro area and by 0.4 per cent in the EU.

For the year 2025 as a whole, GDP increased by 1.4 per cent in the euro area and by 1.5 per cent in the EU, showing an improvement over the 2024 figures of 0.9 per cent and 1.1 per cent respectively.

Compared with the same quarter of the previous year, seasonally adjusted GDP rose by 1.2 per cent in the euro area and by 1.4 per cent in the EU during the fourth quarter of 2025, following increases of 1.4 per cent and 1.7 per cent respectively in the previous period.

In contrast to the growth seen in Cyprus, decreases were observed in Ireland at 3.8 per cent, Romania at 1.9 per cent, and both Estonia and Luxembourg at 0.1 per cent.

Across the Atlantic, the United States saw its GDP increase by 0.4 per cent in the fourth quarter of 2025 compared to the previous quarter, following a 1.1 per cent growth in the third quarter of 2025.

Compared with the same quarter of the previous year, the United States GDP increased by 2.2 per cent, following a 2.3 per cent increase in the previous quarter.

Household final consumption expenditure grew by 0.4 per cent in the euro area and by 0.5 per cent in the EU during the final quarter of the year, after previous increases of 0.2 per cent and 0.3 per cent.

Government final consumption expenditure also trended upwards, increasing by 0.5 per cent in the euro area and by 0.7 per cent in the EU, following 0.7 per cent growth in both areas during the previous quarter.

Gross fixed capital formation rose by 0.6 per cent in both zones, while exports fell by 0.4 per cent in the euro area and 0.3 per cent in the EU.

Imports decreased by 0.2 per cent in the euro area and remained stable in the EU during the same period.

In terms of contributions to GDP growth, household consumption added 0.2 percentage points to the euro area and 0.3 percentage points to the EU.

Government final expenditure was positive at 0.1 percentage points for the euro area and 0.2 percentage points for the EU, while gross fixed capital formation added 0.1 percentage points to both.

Changes in inventories contributed negatively at 0.1 percentage points for the euro area and 0.2 percentage points for the EU, while exports less imports was negative at 0.1 percentage points for both.

The labour market in Cyprus also showed significant strength, with the country recording one of the highest employment growth rates in the bloc at 0.8 per cent.

Ireland and Malta, both at 1.3 per cent, and Spain, also at 0.8 per cent, saw the highest growth of employment in persons compared with the previous quarter.

The number of employed persons across the entire euro area and the EU increased by 0.2 per cent in the fourth quarter of 2025, following previous growth of 0.2 per cent and 0.1 per cent respectively.

Compared with the same quarter of the previous year, employment increased by 0.7 per cent in the euro area and by 0.6 per cent in the EU in the fourth quarter of 2025.

For the full year of 2025, the number of persons employed increased by 0.7 per cent in the euro area and by 0.5 per cent in the EU, following 1.0 per cent and 0.8 per cent in 2024.

Declines of employment were recorded in Lithuania at 2.3 per cent, Estonia at 1.8 per cent, and Germany at 0.1 per cent.

Total employment levels reached 221.1 million people in the EU, with 172.6 million of those located within the euro area.

Actual hours worked increased by 0.6 per cent in the euro area and 0.5 per cent in the EU during the final quarter, and by 0.9 per cent and 0.7 per cent respectively compared to the same quarter of the previous year.

Labour productivity based on persons increased by 0.6 per cent in the euro area and by 0.8 per cent in the EU compared to the same quarter of 2024.

Based on hours worked, productivity compared with the same quarter of the previous year increased by 0.5 per cent in the euro area and by 0.7 per cent in the EU.

Separate Eurostat data released on Friday also showed that the European Union’s real gross domestic product increased by 1.5 per cent in 2025, following growth of 1.1 per cent in 2024.

The figures form part of updated data on GDP and its main components published by Eurostat.

Compared with 2024, GDP increased in every EU member state during 2025, highlighting the broad-based recovery across the bloc.

The largest increases were recorded in Ireland at 12.3 per cent, Malta at 4.0 per cent and Cyprus at 3.8 per cent.

At the other end of the spectrum, Germany and Finland recorded the smallest growth at 0.2 per cent each, while Hungary expanded by 0.4 per cent.