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- The country’s population rose 34% between 2005 and 2025, the third-largest increase in the EU, and grew again in 2025.
- Cyprus had real GDP growth of 3.8% in 2025, well above the EU average of 1.5%, ranking behind only Ireland and Malta.
- Manufacturing remains limited in Cyprus, accounting for 4.5% of GDP, compared with 14.3% across the EU.
- Cyprus faces high energy dependence and slower-than-needed progress on infrastructure, storage and interconnections, despite strong renewable energy potential.
Cyprus is showing a different demographic and economic trajectory from much of Southern Europe, according to Eurostat’s “Key figures on Europe – 2026 edition”. The country combines strong population growth, relatively high birth rates and economic expansion with challenges in research, energy dependence and economic diversification.
Strong demographic position
Cyprus recorded the highest crude birth rate in the EU in 2024, at 10.0 live births per 1,000 people. It also had one of the lowest crude death rates, at 6.9 per 1,000, resulting in a natural population growth rate of 3.1 per 1,000 – the second-highest in the EU after Ireland.
The country’s population has also expanded significantly over the past two decades. Between 2005 and 2025, Cyprus recorded a 34% increase, the third-largest rise in the EU after Luxembourg and Malta.
The trend continued in 2025. Cyprus recorded population growth of 13.7 per 1,000 inhabitants, the second-highest rate in the EU after Malta.
Cyprus remains one of the EU’s smallest countries by population, with about 983,000 residents on 1 January 2025, representing around 0.2% of the EU total.
Younger population than EU average
The demographic structure also differs from the EU average.
People aged 65 and over accounted for 17.7% of Cyprus’ population, compared with 21.6% across the EU. The share of people under 15 was 15.3%, compared with 14.6% in the EU.
Cyprus also performs strongly on life expectancy and tertiary education, while its risk of poverty or social exclusion is below the EU average, according to the indicators highlighted in the Eurostat data.
Economy growing faster than EU average
Cyprus has also recorded relatively strong economic growth.
Real GDP increased by 3.8% in 2025, compared with 1.5% across the EU. Only Ireland and Malta recorded higher growth among EU member states.
The Cypriot economy nevertheless remains small in European terms. Cyprus accounted for around 0.2% of total EU GDP in 2025, alongside Estonia and Latvia. The EU economy was valued at €18.8 trillion, with Germany accounting for 23.8%, France 15.8% and Italy 12.0%.
In terms of purchasing power, Cyprus’ GDP per capita stood at 95% of the EU average. Gross fixed capital formation was equivalent to 25.2% of GDP, compared with 21.2% across the EU.
Research and manufacturing remain weak points
Despite its highly educated population and strong investment activity, Cyprus continues to lag behind the EU in research and development.
Manufacturing also has a much smaller role in the economy. Manufacturing value added accounted for 4.5% of GDP in Cyprus, compared with 14.3% across the EU.
The economy remains heavily oriented towards services, including tourism and internationally focused business activities. This creates a need for greater diversification and stronger links between investment, productivity, technology and innovation.
High energy dependence
Energy remains another structural challenge.
Cyprus has a high level of energy dependence compared with most EU countries, while progress on energy infrastructure, storage and interconnections has been slower than required.
This is particularly significant for a country with abundant sunshine and significant potential for renewable energy production. Reducing dependence on imported energy and strengthening infrastructure could therefore have implications for both competitiveness and resilience.
Investment is strong, but its direction matters
The Eurostat figures show that Cyprus is not lacking investment. Gross fixed capital formation reached 25.2% of GDP, above the EU average of 21.2%.
The challenge is increasingly about where that investment is directed. Greater investment in research, technology, innovation, energy infrastructure and productive activities could help strengthen productivity and broaden the country’s economic base.
A different position from much of Southern Europe
Taken together, the figures present a mixed picture.
Cyprus combines a relatively young and growing population, strong birth rates, low unemployment and economic growth above the EU average. At the same time, it faces structural challenges in R&D, manufacturing, energy dependence and economic diversification.
The European Commission’s latest forecast also expects Cyprus’ economy to remain resilient, although it projects growth to moderate to 2.3% in 2026 from 3.8% in 2025, partly reflecting the impact of the conflict in the Middle East and higher energy prices.
The data therefore point to a central challenge for the coming years: maintaining growth while increasing productivity, strengthening technological capacity and building a more diversified and resilient economy.
Also read: Christodoulides announces new US investments in Cyprus
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