Analysis shows uneven productivity growth in the Cypriot economy

A new study by the Economic Research Centre of the University of Cyprus reveals significant disparities in productivity growth across the Cypriot economy. Between 1996 and 2025, the average annual growth in labor productivity was 1.44%, though this national figure masks substantial sectoral differences. The data highlights a concentration of gains in specific industries, with Information and Communication emerging as the primary driver of growth.

From 2022 to 2025, labor productivity grew at an average annual rate of 1.70%. The Information and Communication sector recorded a remarkable growth rate of 6.51% during this period, accompanied by significant increases in real wages. Conversely, the agricultural sector faces a contraction, with productivity declining by 4.06% and real wages falling annually by 1.83% based on production prices. Across the economy, real wages adjusted by the Consumer Price Index increased by 1.95% annually between 2022 and 2025.

The findings underscore a long-standing structural issue where traditional industries struggle to keep pace with dynamic sectors like ICT. The Economic Research Centre suggests that these trends necessitate more targeted policy interventions to boost overall competitiveness and improve living standards across all economic sectors.