The Cypriot Economy: Navigating Challenges and Opportunities in 2024
Cyprus, the sun-drenched island nation in the Mediterranean, is no stranger to economic turbulence. Over the past decade, it has weathered financial crises, banking collapses, and a pandemic—yet its economy continues to adapt and evolve. Today, Cyprus stands at another crossroads, grappling with rising interest rates, a resilient but uneven property market, and a tourism sector struggling to regain its footing. But amid these challenges lie opportunities, particularly for small businesses and women entrepreneurs, who are increasingly driving innovation. Let’s break down the key forces shaping Cyprus’ economic landscape in 2024.

1. Rising Interest Rates: A Double-Edged Sword for Borrowers

The European Central Bank’s aggressive rate hikes have sent shockwaves across Cyprus, where mortgages and business loans are now more expensive than ever. Data from Delfi Partners reveals that mortgage demand has plummeted in the first three quarters of 2024, squeezing an already tight real estate market. For first-time homebuyers, this means delayed dreams of ownership; for developers, it’s a warning sign of slowing demand.
But higher rates aren’t all bad news. Savers and conservative investors are finally seeing decent returns on deposits, and banks are being forced to reassess risky lending practices. The question now is whether the government will step in with targeted relief—perhaps through subsidized loans or tax incentives—to keep the housing market from stalling completely.

2. The Property Market: Resilience Amid Regional Disparities

Despite economic headwinds, Cyprus’ property market remains surprisingly robust. Foreign investors, particularly from non-EU countries, continue to pour money into luxury developments, drawn by the island’s stable politics and favorable tax regime. Limassol, the country’s financial hub, now boasts the highest rental prices, with houses averaging a staggering €4,492 per month. Meanwhile, Famagusta—still recovering from decades of political division—offers the most affordable rents, highlighting the stark regional inequalities within the market.
Experts predict this resilience will hold through 2025, but cracks are emerging. Over-reliance on foreign buyers leaves the market vulnerable to global economic shifts, and rising construction costs could slow new projects. If Cyprus wants sustainable growth, it must balance high-end investments with affordable housing initiatives to support local residents.

3. Tourism & SMEs: The Backbone of Recovery

Tourism, traditionally Cyprus’ economic lifeline, is facing an uphill battle. Of 741 hotels and resorts preparing to reopen post-pandemic, only 100 have secured licenses—a mere 13.5%. Bureaucratic delays and strict safety regulations are partly to blame, but the bigger issue is labor shortages and soaring operational costs. Without faster licensing and financial support, many small family-run hotels may never reopen, leaving entire communities struggling.
Meanwhile, small and medium-sized enterprises (SMEs) are proving to be the unsung heroes of Cyprus’ recovery. A recent Eurobarometer survey highlighted their critical role in job creation and innovation, yet many still struggle with access to funding and red tape. Programs like the Academy for Women Entrepreneurs (AWE), which just wrapped up its 2024 cohort, are helping bridge the gap by equipping female founders with skills and networks to scale their businesses.

Looking Ahead: Collaboration for Sustainable Growth

Cyprus’ economy is at a pivotal moment. Rising interest rates threaten to cool the property market, while tourism’s slow rebound underscores the need for regulatory reform. Yet the resilience of SMEs and the rise of women-led startups offer a blueprint for a more inclusive and dynamic future.
The path forward requires collaboration—between policymakers, financial institutions, and entrepreneurs—to ensure growth benefits all Cypriots, not just foreign investors. If the island can strike this balance, it may yet emerge stronger, proving once again its ability to adapt in the face of adversity.