GDP records slowest increase since Q4 2023 in Q4

Cypriot economy ends 2024 on a lower note: A second release confirmed that GDP growth slowed to 2.6% year on year in Q4 (Q3: +3.9 yoy), marking the slowest growth since Q4 2023. On a working-day and seasonally adjusted quarter-on-quarter basis, economic growth slowed markedly to 0.3% in Q4, compared to the previous period's 0.9% expansion. Looking at 2024 as a whole, economic growth rose to 3.4% from 2023’s 2.6% but came in below the prior 10-year average of 4.4%.

Consumption and exports drive the slowdown: Year on year household spending growth fell to 2.5% in Q4, marking the weakest expansion since Q1 2021 (Q3: +3.9% yoy), and public spending growth moderated to 2.5% in Q4 (Q3: +5.2% yoy). On the flip side, fixed investment bounced back, growing 62.0% in Q4 and contrasting the 6.4% decrease logged in the previous quarter, due to a sharp rebound in machinery, equipment and weapon systems investment. On the external front, exports of goods and services flatlined in Q4, after growing 4.3% in Q3. Meanwhile, imports of goods and services growth sped up to 11.9% in Q4 (Q3: +0.9% yoy).

Momentum to soften ahead: Our Consensus is for GDP growth to slow in 2025 from 2024 mainly due to a weaker expansion in exports amid heightened global trade frictions. That said, fixed investment should strengthen on the heels of ECB rate cuts, helping Cyprus to remain among the fastest-growing economies in the Euro Area.

How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Cypriot private consumption projections for the next ten years from a panel of 4 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable private consumption forecast available for Cypriot private consumption.

Download one of our sample reports to visualize what a Consensus Forecast is and see our Cypriot private consumption projections.

Want to get access to the full dataset of Cypriot private consumption forecasts? Send an email to info@focus-economics.com.