Cyprus is one of the most interesting cases within the European Union. While Europe is facing low birth rates, ageing and long-term population shrinkage, Cyprus shows a clearly more dynamic demographic picture, according to the content of Eurostat's Key figures on Europe 2026 report, which covers people, society, economy and business, environment and natural resources.
This does not mean that Cyprus does not face problems. However, it does mean that, in several of the main indicators, it is in a different position from Greece and Southern European countries.
The Cyprus of 2026 is more powerful than its size suggests. With less than one million inhabitants, it has managed to create an economy with growth above the European average, low unemployment, a high level of education, relatively low social vulnerability and very positive demographic dynamics compared to much of Southern Europe.
According to Eurostat, the country is facing a critical crossroads. The model based mainly on services, tourism, investment and international activity can continue to generate growth. But to turn growth into long-term convergence with Europe's richer countries, greater investment is needed in research, technology, productivity, energy security and productive diversification.
The report suggests that the most characteristic contradiction of Cyprus is this: it has a highly educated population, but low investment in research and development, has a lot of sun, but very high energy dependence, has high growth, but a small production base. Therefore, the big question of the next decade is not whether Cyprus will continue to grow. It is whether it will be able to turn this growth into higher productivity, technological power, and greater economic resilience. According to the report, let's see the pros and cons of Cyprus:
Strengths
Cyprus' economic growth is above the EU average, unemployment is at a relatively low level, the population is growing and the country is younger than the European average. In particular, Cyprus has the highest gross birth rate in the EU and in terms of life expectancy it is in the high European performance.
Higher education is one of the country's greatest assets and in terms of social indicators, the risk of poverty and social exclusion is lower than the EU average. In relation to the fiscal position, public debt and fiscal figures are relatively favourable.
Weak points
Cyprus is well below the European average in research and development, Manufacturing has a much lower weight than in the EU and in terms of energy dependence remains one of the highest in Europe. In energy infrastructure, there are delays in storage and interconnections. There is also early school leaving despite the high percentage of graduates, the indicator remains above average.
There is dependence on services and tourism and the productive base needs greater diversification. Gross fixed capital formation accounted for around 25.2% of GDP, compared with 21.2% in the EU. So there is significant investment activity. The problem is not so much the absence of investment, it is where the investments are headed. The big bet is to increase the share directed to technology, research, innovation, energy infrastructure and productive activities.
Wealth per capita
In terms of purchasing power, Cypriot GDP per capita was at 95% of the EU average. This means that Cyprus is not among the poorest economies in the Union, but neither does it belong to the group of the richest. It is very close to the European average. This position is better than that of several countries in Southern and Eastern Europe, but it is significantly distant from Luxembourg, Ireland and other countries with much higher per capita incomes. Cyprus has achieved a significant improvement in employment.
According to Eurostat data, unemployment is below the European average and the distance from countries with high unemployment, such as Greece and Spain, is large. But the comparison should not stop there. Malta has even lower unemployment, while Central European countries such as the Czech Republic and Poland are also extremely underperforming. So Cyprus is on the good side of the European ranking, but without being the top country.
Changing Europe's demographic map
This is where one of the major differences lies. The share of the population aged 65 and over in Cyprus was around 17.7%, compared to 21.6% in the EU. At the same time, those under 15 made up about 15.3% of the population, compared to 14.6% in the EU. The demographic picture is even more striking when we look at the long-term change.
Between 2005 and 2025 the population of Cyprus grew by around 34%, one of the largest increases in the EU. Only Luxembourg and Malta recorded a larger increase. And the latest data confirm the dynamics, on January 1, 2026 Cyprus had one of the highest positive population changes in the EU, at a rate of around +13.7 per 1,000 inhabitants.
Cyprus remains one of the smallest countries in the EU in terms of population. In 2024, it had around 934,000 inhabitants, or just about 0.2% of the European Union's population. But what matters is not only the size, but the direction. Cyprus has recorded significant population growth over the last two decades, in contrast to Greece, where the long-term trend is negative. This difference is linked both to births and – and above all – to migration flows.
The Cypriot economy is small but dynamic
The economy of Cyprus may be small on a European scale, but it shows particular dynamics. The total GDP of the EU was €18.8 trillion. in 2025. Germany accounted for 23.8%, France 15.8% and Italy 12.0%. Cyprus, together with Estonia and Latvia, accounted for around 0.2% of the EU economy.
In 2025, the real GDP of the European Union grew by 1.5%. Cyprus, however, recorded a GDP growth rate of 3.8%, occupying one of the highest positions in the EU, behind only Ireland and very close to Malta, which recorded an increase of 4.0%. The picture continued into 2026. In the second quarter of the year, Cypriot GDP grew by 3.3% year-on-year, while Greece grew by 1.9% and Italy by 1.0%.
Spain moved to 2.7%. The difference is significant: Cyprus is not only in a period of economic recovery, but has growth rates significantly higher than the EU average.
