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EACEA National Policies Platform:Eurydice
Political and economic situation


1.Political, social and economic background and trends

1.4Political and economic situation

Last update: 14 December 2023


Political situation

Mr Nicos Christodoulides is the present President of the Republic of Cyprus after winning the second round of the presidential election on the 12th of February 2023 with a majority of 51.97%. The new ministers gave the prescribed affirmation during a special ceremony at the Presidential Palace on March 1st, 2023.  

Economic situation

Since the accession of the Republic of Cyprus to the European Union, in May 2004, the island's economic system has undergone significant reforms. For example, tariffs and quantitative restrictions have been eliminated for all manufactured goods and agricultural products originating in Cyprus and other EU countries. Trade and interest rates have been liberalized, while price controls and investment restrictions have been lifted. The full liberalization of the foreign direct investment regime in Cyprus has also been implemented. Another significant development was the tax reform implemented in 2002, which resulted in a shift from direct to indirect taxes.

Cyprus enjoyed strong growth in the first decade of the millennium, twice that of the euro area. However, Cyprus was increasingly faced with serious challenges in terms of unsustainable external and internal macroeconomic imbalances. The global economic recession in the second decade of 2000 and the exposure of the Cypriot banks to the Greek economy had significantly impacted the Cyprus economy; bank credit policy, poor risk management practices and insufficient supervision were also recognized as partly responsible for macroeconomic imbalances. 

Following a request by the Republic of Cyprus, on 25 June 2012, the European Commission, the European Central Bank, and the International Monetary Fund agreed to an Economic Assistance Programme with the Cypriot authorities, on 2 April 2013. The Programme covered the period 2013-2016 and it provided for a financial package of 10 billion.

 Cyprus has since modernized its economy. It has restructured and recapitalized its banks, which are now about half the size they were before the crisis. Cyprus has also improved financial regulation and supervision. Its fiscal deficit has shrunk, and the public debt is sustainable. And it has pushed through a long list of reforms in areas such as wage policies, the public administration, services, and has modernized its legal framework. Cyprus won back the confidence of investors as a result and was gradually able to return to the bond market. The ESM (European Stability Mechanism) disbursed €6.3 billion in loans. Cyprus successfully exited its program in March of 2016.

Gross Domestic Product  

The Cyprus economy exhibited conditions of slower economic activity since 2009. In 2014, the  Gross Domestic Product (G.D.P.) of the Republic of Cyprus was €17,567.4 mn at current prices and €15,101.1 mn at constant prices of 2014. The G.D.P. for the year 2021 was 23352.8, compared to 21617.92021 in 2020.  

The GDP growth rate in real terms during the fourth quarter of 2021 is positive and estimated at +6.4 % over the corresponding quarter of 2020. 

Employment/unemployment rate

Based on the results of the Labor Force Survey for the 3rd quarter of 2023, the labor force amounted to 494,622 people or 65.5% of the population (men 70.6%, women 60.9%) compared to 486,492 people (65, 4%) in the corresponding quarter of 2022.
The number of people employed was 466,117 people and the employment rate was 61.7% (men 66.5%, women 57.4%) compared to 453,625 people (61.0%) in the corresponding quarter of 2022.
The number of unemployed people was 28,504 and the unemployment rate was 5.8% of the labor force (men 5.8%, women 5.8%), compared to 32,868 people (6.8%) in the corresponding quarter of 2022.
Among young people aged 15-24, the unemployment rate was 17.3% of the age workforce
of these (males 18.4%, females 16.2%) compared to 19.9% (males 18.0%, females 21.6%) in
the corresponding quarter of 2022.
Regarding the duration of unemployment, 50.7% of all unemployed people were looking for work for
A period of less than 6 months, 18.0% for a period of 6-11 months, while 31.3% were long-term
unemployed. The corresponding percentages for 3 the 2022 quarter was 56.2%, 14.9% and 28.9%.

GDP expenditure on education 

Public expenditure in all levels of education, amounted to €1.306,5 million, in 2020, and accounted for 13,4% of the Government Budget and 6,0% of the Gross Domestic Product.

Education attainment level of the adult population

 Data on the highest educational attainment for persons 20 years and over, in certain reference years, is shown in the following table: 


                         Highest Educational Attainment for Persons 20 Years of Age and Over

Years of Reference 1960 1980 2001 2005 2012 2013
Not attended/completed primary (%) 25 8 9 7 5 5
Primary (%) 59 55 23 21 14 14
Secondary (%) 15 29 43 47 47 47
Tertiary (%) 1 8 25 25 34 34

Source: CYSTAT (2015), Statistics of Education 2012/2013. Printing Office of the Republic of Cyprus.