Filenews 18 November 2025 - by Theano Thiopoulou
Cyprus is in the club of European countries with the strongest growth in 2025 with total consumption increasing by 6.2% and investment accelerating by 18.4% respectively on an annual basis, according to the European Commission's autumn forecast.
The growth of the economy is forecast to be at 3.4% this year and in 2026 and 2027 to decline to 2.6% and 2.4%. Private consumption is expected to decline gradually as real wage growth slows, but investment is forecast to strengthen, supported by the completion of Recovery and Resilience Fund (RRF) projects in 2026. The returns of the Cypriot economy are much better than the European average for all time periods.
Specifically, the Commission estimates real GDP growth of 1.4% in the EU in 2025 and 2026, with an increase of up to 1.5% in 2027. In the euro area, real GDP is forecast to grow by 1.3% in 2025, 1.2% in 2026 and 1.4% in 2027. Inflation in the euro area is forecast to continue declining, reaching 2.1% in 2025, and to hover around 2% over the forecast horizon. In the EU, inflation is expected to remain marginally higher and decline to 2.2% in 2027.
The Eurozone countries that are expected to have a high growth rate in 2025 above 3%, based on the analysis of "F" are four: Ireland 10.7%, Malta with 4%, Cyprus 3.4%, Croatia 3.2%. Of the countries outside the Eurozone, Poland 3.2%, Bulgaria 3% (it will become a member of the Eurozone on January 1, 2026) and Denmark 2% are projected to have the highest growth rate in 2025. In the rest of the countries, growth in 2025 is estimated by the Commission to be: Belgium 1%, Germany 0.2%, Estonia 0.6%, Spain 2.9%, France 0.7%, Italy 0.4%, Latvia 1%, Lithuania 2.4%, Luxembourg 0.9%, Netherlands 1.7%, Austria 0.3%, Portugal 1.9%, Slovenia 1%, Slovakia 0.8%, Finland 0.1%.
Oil prices
In its autumn forecast report, the Commission estimates that concerns about global demand have affected the price of oil. At the cut-off date of this forecast, Brent crude oil futures prices were 3% lower for 2026 than assumed in the Spring 2025 forecasts. They are expected to remain at around US$63 per barrel in 2027. Although wholesale electricity prices are expected to decline slightly on average throughout the forecast horizon, they are projected to be around 2% higher in 2026 than projected in the spring.
Impact of tariffs and climate
Commission technocrats estimate that the increasing frequency of climate-related disasters could undermine resilience and growth, as the costs of such events are likely to increase further.
