Cyprus profile

Demography and Health

Cyprus is a small island country with a population of about 1.36 million in 2024. The population is growing in part through positive net migration, which reached roughly 8,138 people in 2024, suggesting that Cyprus remains an attractive destination for workers and residents despite its limited land area. The country has a high life expectancy at birth, at 81.6 years in 2023, indicating favorable health outcomes and living standards. The crude birth rate stands at 10.8 per 1,000 people (2023), while the crude death rate is 7.06 per 1,000 (2023), implying a modest natural increase when combined with migration. Child mortality remains relatively low, with under-5 mortality at 3.5 per 1,000 live births (2023). These indicators together signal a mature demographic profile for a small economy, with continued population growth driven by migration rather than birth alone. On the health expenditure front, current health expenditure accounts for 8.87% of GDP (2022), while physicians number about 3.55 per 1,000 people (2021) and domestic health expenditure per capita on a purchasing power parity basis is around 3,857 international dollars (2022). Cyprus also reports low levels of under-nourishment (2.5% of the population in 2022) and a poverty headcount of 13.9% of the population at national poverty lines (2021), suggesting that health and nutrition outcomes are relatively strong for a country of its income level, though pockets of vulnerability remain. The suicide rate is low at 3.02 per 100,000 (2021). Overall, the demography and health indicators point to a well-educated, long-lived population with good access to health services, albeit with ongoing challenges in ensuring broad-based welfare and addressing inequality.

Economy

Cyprus exhibits a high level of income per capita, with GDP per capita at current prices estimated at 38,654 US dollars in 2024, and a GDP per capita at purchasing power parity of 61,240 international dollars (2024). The inflation rate is subdued at 1.8% (2024), contributing to price stability for households and businesses. The economy shows a strong export orientation: exports of goods and services accounted for 96.7% of GDP in 2024 (ranked 7), paired with imports constituting about 93.1% of GDP (2024, rank 10). This underscores Cyprus’s dependence on external demand and global supply chains, consistent with its service-oriented economic structure (finance, tourism, professional services) and logistics connectivity. The unemployment rate was 5.83% in 2023 (rank 38), indicating a relatively tight labor market by international standards. The country also experiences a moderate current account deficit of 8.39% of GDP in 2024, reflecting a sizable import bill and the absorption of foreign capital into services and investment, rather than a large, persistent surplus. The economy benefits from a stable regulatory environment: regulatory quality is high at 0.778 (2023), and government effectiveness is strong at 0.738, suggesting capable public institutions and a supportive business climate. However, control of corruption remains a concern with a score of 0.333 (2023), implying room for improvement in governance transparency and anti-corruption efforts. Long-run indicators showing innovation intensity are modest: research and development expenditure stands at 0.745% of GDP in 2022, and patent activity by residents is relatively low (1.0 in 2021), signaling that innovation capacity is improving but still behind leading advanced economies. Overall, Cyprus combines high income with open, service-led growth, while balancing moderate macro risks from external demand, trade balance dynamics, and governance challenges that warrant continuing reforms.

Trade and Investment

Cyprus is a highly open trading economy. The export share of GDP at 96.7% in 2024 places Cyprus among the world leaders in trade openness, with imports comprising about 93.1% of GDP in the same year. This reflects a strong dependence on external markets for growth, goods, and services—from tourism, financial services, and professional services to manufactured inputs. The country runs a current account deficit of 8.39% of GDP (2024), consistent with a high import propensity and substantial external financing needs. Foreign direct investment, net inflows, show a negative reading of -10.5% of GDP in 2023, suggesting outflows or portfolio movements that offset inflows, which may reflect global capital reallocation patterns rather than a structural withdrawal of confidence. On the logistics side, the Logistics Performance Index (Quality of trade and transport-related infrastructure) stands at 2.8 (2022), with a rank of 18, indicating a solid if not top-tier ability to move goods efficiently. Cyprus’s high-tech export footprint is modest in absolute terms, with high-technology exports valued at about 107 million US dollars in 2023 (rank 81), underscoring that while there is a technological dimension, high-value tech manufacturing remains small relative to peers. Patent activity among residents is limited (1.0 in 2021), and overall foreign direct investment remains a key area for policy focus to diversify the economy and reduce vulnerability to external shocks. Taken together, Cyprus’s external position reflects a deeply open economy with strong trade integration, but with notable structural challenges in attracting and retaining investment, boosting innovation, and balancing external accounts.

Governance and Institutions

Cyprus’s governance framework shows a mix of strengths and weaknesses. The regulatory quality score of 0.778 (2023) indicates a relatively favorable regulatory environment conducive to business activity and rule-based policy implementation. Government effectiveness is also strong at 0.738 (2023), signaling capable public services and policymaking. Conversely, the control of corruption stands at 0.333 (2023), suggesting persistent governance and transparency challenges that can undermine trust and efficiency in the public sector. Political stability and absence of violence/terrorism score 0.41 (2023), ranking 76, implying moderate stability with some vulnerability to shocks, possibly reflecting regional dynamics and domestic political considerations. The rule of law is moderately strong at 0.628 (2023), contributing to predictable legal frameworks for contracts, property rights, and dispute resolution. Overall, Cyprus enjoys a reasonably solid governance foundation with well-functioning public administration and regulation, but continued reforms toward greater transparency, anti-corruption measures, and institutional resilience are important to sustain investor confidence and social cohesion in the face of external pressures and internal reform needs.

Infrastructure and Technology

Cyprus demonstrates advanced digital and physical infrastructure in several respects. Individuals using the Internet reach 91.2% of the population in 2023, signaling broad digital connectivity and potential for digital services and e-government adoption. The country also shows robust human-capital indicators relevant to service-oriented growth: life expectancy at birth is 81.6 years (2023), and physicians per 1,000 people stand at 3.55 (2021), indicating a solid health workforce density supportive of a high-income economy. The energy and innovation landscape shows renewable energy contributing 15.6% of total final energy consumption in 2021, indicating ongoing diversification of the energy mix but room for further growth. R&D expenditure is 0.745% of GDP in 2022, relatively modest by international standards, and patent applications by residents are 1.0 in 2021, suggesting that domestic innovation activity is limited but present. Exports of high-technology goods are recorded at 107.3 million USD (2023), a positive signal for technology upgrading albeit small in scale relative to larger economies. The logistics environment scores well, with a Logistics Performance Index of 2.8 (2022) and a rank of 18, reflecting reasonably competent trade and transport infrastructure. Taken together, Cyprus benefits from strong digital connectivity, a capable health and education base, and improving but still developing innovation and energy transition trajectories. The island’s geographic position enhances trade linkages, but persistent capital mobility dynamics and modest domestic R&D intensity suggest continued investments in infrastructure and innovation policy will be crucial to sustain competitiveness.

Environment and Sustainability

Cyprus faces environmental and sustainability challenges and opportunities characteristic of a small, open economy with growing energy and water concerns. Renewable energy accounts for 15.6% of total final energy consumption in 2021, indicating progress toward decarbonization but also signaling significant dependence on fossil fuels still in use. Total greenhouse gas emissions per capita (excluding LULUCF) stand at 7.68 t CO2e per person in 2023, placing Cyprus among moderate per-capita emitters in the regional context. Water resources face stress, with freshwater withdrawal representing 32.1% of available resources in 2021, highlighting vulnerability to droughts and the need for water-efficient technologies and management. The level of water stress has implications for agriculture, industry, and domestic consumption, especially in a climate of rising temperatures. On the social front, the prevalence of undernourishment is low at 2.5% (2022), and the poverty headcount at national poverty lines is 13.9% (2021), indicating relatively good baseline nutrition with pockets of material deprivation that can be intensified by environmental pressures. Biodiversity and land use pressures are not specified here, but the combination of energy transition, water stress, and climate considerations suggests that Cyprus’s sustainability strategy will need to emphasize renewables, water-efficient irrigation and infrastructure, and climate-resilient planning to sustain growth while protecting natural resources.