Central Bank of Cyprus publishes 2025 financial stability report

On July 28, 2026, the Central Bank of Cyprus (CBC) released its annual Financial Stability Report for 2025. The report highlights that while the Cypriot economy and financial system remain resilient, there are significant medium-term risks that require vigilant monitoring. Key concerns cited by the CBC include heightened geopolitical tensions, ongoing conflicts affecting international trade, risks associated with global debt, market repricing, real estate fluctuations, climate-related hazards, and cybersecurity threats.

Despite the uncertain international environment, the report notes positive trends within the domestic economy, including improving public finances and high bank resilience. A notable achievement is the continued deleveraging of the private non-financial sector. By the end of 2025, the total private debt-to-GDP ratio declined to 119.7%, approaching the Eurozone average of 116.1%. Specifically, corporate debt fell to 65.5% of GDP, well below the European Commission's 85% threshold, while household debt reached 54.2%, falling slightly below the 55% benchmark.

The CBC emphasizes a forward-looking, prudent approach to policy. By utilizing severe but plausible scenarios, the bank aims to identify vulnerabilities early to safeguard the stability of the financial system, though it stresses that these simulations do not predict imminent crises.