CYPRUS - IN THE TOP THREE OF THE EU FOR GROWTH - CONSUMPTION - THE DEGREE OF SOCIAL DIFFUSION OF PROSPERITY IS A QUESTION MARK - Filenews 14/11 by Theano Thiopoulou
Cyprus is in the top three economies of the European Union in two key indicators - economic growth and private consumption - according to the two parallel reports released yesterday by Eurostat.
The data confirm that strong domestic demand acts as the main locomotive of the Cypriot economy, allowing it to significantly outperform the sluggish Eurozone.
However, behind the impressive macroeconomic indicators, the question of social diffusion remains, as GDP growth and rising average wages do not automatically translate into an improvement in living standards for all households.
Growth of 3.1% against the current
Based on the preliminary estimates of the European statistical office for the third quarter of 2026 (July – September), the Gross Domestic Product (GDP) of Cyprus increased by 3.1% year-on-year and by 0.5% compared to the second quarter of the year.
This annual performance is more than double the average of the Eurozone (+1.3%) and the EU (+1.5%), ranking Cyprus in third place among the member states with available data, behind only Ireland (+3.6%) and Poland (+3.6%). Sweden (+2.8%), Spain (+2.7%), Bulgaria (+2.5%), Portugal (+2.4%), Lithuania (+2.3%) and Estonia (+2.2%) also recorded remarkable annual performances, showing that regional economies are moving at a much faster pace than the central European core.
"Fuel" consumption
At the same time, Eurostat's detailed report on household consumption by purpose sheds light on the main pillar of this resilience. In Cyprus, household consumption expenditure (adjusted for inflation) recorded an increase of +5.1% in 2025 compared to 2024 - the third highest in the EU after Bulgaria (+7.0%) and Malta (+6.8%) - while the European average was limited to +1.6%. On the other hand, a decrease in consumption was recorded only in Finland (-1.0%) and Estonia (-0.3%).
Of particular interest are the differences in the structure of expenditure by country:
- Housing and energy: They absorb 23.8% of the EU budget, with the Czech Republic (32.3%), Finland (29.2%) and Denmark (28.7%) bearing the brunt. Croatia (14.1%), Malta (15.0%) and Latvia (16.0%) maintain the lowest shares, leaving more room for other expenditure. Cyprus is also traditionally at the lowest levels in the EU (below 16%), which largely explains the greater flexibility of spending on services and catering.
- Food and transport: Households in Bulgaria (20.1%), Latvia (19.6%) and Estonia (19.0%) spend the largest share on food (compared to 13.2% in the EU and only 8.7% in Luxembourg), while Slovenia (16.0%), Romania (15.9%) and Greece (13.6%) lead the way in transport. In Cyprus, expenditure on food and transport is close to the European averages (about 13% and 12.5% respectively).
- Dependence on consumption: As a percentage of GDP, the highest consumption was recorded in Greece (75.6%), Croatia (68.0%) and Portugal (66.5%), compared to only 24.6% in Ireland and 32.8% in Luxembourg. In Cyprus, it stood at 56.6% of GDP (slightly above the EU average of 52%), recording a historic low due to the rapid growth of investment and exports of services.
