Cyprus records historic low unemployment rate in second quarter of 2026

Cyprus recorded a historic low unemployment rate of 3.6 per cent during the second quarter of 2026, according to the latest economic bulletin from the Central Bank of Cyprus (CBC). Marios Polemidiotis, an economist at the CBC, noted that the country’s labour market has shown significant resilience despite various external shocks, including the pandemic, energy crises, and persistent geopolitical uncertainty.

However, the report warns that the economy is approaching full employment, which limits the potential for further growth through hiring. The CBC identified emerging structural challenges, specifically demographic shifts and an ageing population, which will constrain the growth of the domestic workforce. Additionally, rising housing costs and a limited supply of residential properties are now cited as significant threats that may discourage both local and foreign workers from entering the labour market.

To ensure future economic growth, the analysis suggests that the focus must shift from expanding the workforce to enhancing individual productivity. Failure to address these labour shortages and housing barriers could lead to increased wage pressures for businesses and reduced labour mobility across various sectors.