Public debt continued to fall in 2025, reaching its lowest percentage of GDP since 2008, while Cyprus also recorded its fourth consecutive fiscal surplus. 

President Nikos Christodoulides on Friday used his social media profile on X to say that public debt had reached its lowest percentage of GDP since 2008, “as a result of our responsible fiscal policy”.

He added that “this is a development that is even more important in the current geopolitical situation”. 

According to preliminary data published by the statistical service (Cystat) on March 3, the fiscal surplus reached €939.2 million in 2025, or 2.6 per cent of GDP, down from €1.44 billion, or 4.1 per cent of GDP, in 2024. 

However, this was the fourth consecutive year of fiscal surplus and the second-best fiscal performance of the past 17 years, behind only 2024 and slightly below the 2.7 per cent recorded in 2022. 

The continued improvement also came in better than expected.  

Around September last year, public debt had been projected at about 57 per cent of GDP, after earlier forecasts had pointed to a fall below 60 per cent of GDP only around the end of 2026. 

The improvement follows a long and difficult fiscal adjustment. After persistent deficits began in 2009, public debt rose from 59.3 per cent of GDP in 2010 to 112.7 per cent in 2014.  

A return to surplus began in 2016 and strengthened in 2017, before the collapse of the Cooperative and the pandemic pushed public finances back into deficit, sending the debt ratio to a record 113.6 per cent in 2020. 

Since then, the steady recovery of the economy and continued surpluses have allowed for a rapid reduction in public debt. 

The stronger fiscal picture has also supported successive credit rating upgrades.  

After falling into non-investment grade during the crisis, Cyprus’ long-term credit rating has now returned to upper medium-grade territory across all five rating agencies, helping to lower borrowing costs and support foreign investment.