The International Monetary Fund (IMF) expects a higher growth rate for Cyprus for 2025 and 2026 in its October edition of the World Economic Outlook (WEO) compared with the estimates included in the April edition.
Specifically, it projects that the growth rate will reach 2.9% of GDP in 2025 and 2.8% in 2026, compared with 2.5% for 2025 and 2.7% for 2026 in the April projections.
In addition, the IMF estimates that consumer prices will increase by only 0.7% in 2025, marking the lowest rise in the euro area, and by 1.3% in 2026. By comparison, in the April estimates, inflation was projected at 2.3% for 2025 and 2% for 2026.
Regarding the current account balance, the revised projections indicate a deficit of -8.5% in 2025 and -9.1% in 2026, higher than the April forecasts of -7.3% and -7.8%, respectively.
The unemployment forecast has also been revised downward. Unemployment is expected to reach 4.5% in 2025 and 4.7% in 2026, compared with 4.8% for 2025 and 5% for 2026 in the April projections.
The IMF reports overall improved global growth rates due to the smaller-than-expected impact of tariff impositions. Specifically, it expects global growth to slow from 3.3% in 2024 to 3.2% in 2025, and further to 3.1% in 2026. By comparison, the April estimates had projected growth at 2.8% for 2025 and 3% for 2026.
However, IMF notes that "trade policy uncertainty remains elevated in the absence of clear, transparent, and durable agreements among trading partners—and with attention starting to shift from the eventual level of tariffs to their impact on prices, investment, and consumption".
(Source: CNA)
