Analysis of Cyprus current account balance and geopolitical outlook for 2025

According to a Eurobank Research analysis, Cyprus recorded an improvement in its current account balance (CAB) in 2025, with the deficit decreasing by 1.8 percentage points to 6.4% of GDP. This follows a previous high of 9.7% in 2023. The improvement was largely driven by a record surplus in the services balance, which reached 25.2% of GDP, up from 23.5% in 2024. Growth was noted in intellectual property (5.3%), tourism (5.7%), and financial services (6.5%). Conversely, the deficit in primary income widened to 11.2% due to increased profit repatriation, while the goods deficit remained high at 19.5%. Eurobank warns that geopolitical tensions in the Middle East may stall this progress by impacting tourism, which heavily relies on EU and Israeli arrivals, and by disrupting trade routes. Despite these risks, the report notes that Cyprus may remain a relatively stable investment destination compared to its neighbors. The transportation and business services sectors experienced a slight decrease in their surplus margins compared to 2024.