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Cyprus overview


The EBRD’s mandate in Cyprus expired at the end of 2020 and the Bank has ceased investing in any new projects on the island, but will continue to manage an existing portfolio.

In Cyprus we focused on:

  • Strengthening the financial sector to build up resilience and improve governance
  • Supporting the authorities’ privatisation programme
  • Assisting corporate restructuring and providing finance to small and medium-sized enterprises

Founding EBRD member Cyprus received recipient country status in May 2014 following a decision by the Bank’s shareholders at the EBRD’s Annual Meeting in Warsaw.

The change in status was requested in February 2014 in a letter which sought EBRD support only for “as long as is strictly necessary to help Cyprus address its transition challenges”.

The Warsaw decision assumes that the EBRD will not engage in new operations in Cyprus after the end of 2020.

A country strategy was adopted on 6 May 2015. The document identified the priorities for the EBRD’s engagement in Cyprus.

The Cyprus economy has recovered from a deep recession which followed the boom period between 2004, when Cyprus joined the EU, and 2008, when it adopted the euro.

However, despite making important progress towards European integration, significant transition challenges and a number of key structural issues had not been addressed and non-performing loans represented a significant issue.

Since then, there has been a remarkable turnaround in the economy. Solid growth from 2015 was accompanied by falling unemployment, careful management of public finances and progress in structural reforms in various sectors of the economy.

During its operations in Cyprus, through a combination of investment, policy dialogue and technical assistance, the Bank made a significant contribution to the stabilisation and recovery of the local economy.

The EBRD's 2017 Annual Meeting and Business Forum was held in Nicosia.  In June 2017, the EBRD received an honorary award for its contributions to the economy of Cyprus from the Cyprus Investment Promotion Agency.

In 2017 Cyprus contributed €2,150,000 to facilitate the provision of advisory services to SMEs in the country.

The EBRD’s latest Cyprus strategy was adopted on 6 May 2015

Cyprus' policy response to the coronavirus crisis

The EBRD is monitoring Cyprus' policy response to the coronavirus pandemic. Our biweekly publication identifies the major channels of disruption as well as selected impact and response indicators.

Learn more

EBRD forecast for Cyprus's real GDP growth in 2020 -7.5%
EBRD forecast for Cyprus's real GDP growth in 2021 4.0%
The Cypriot economy is being severely hit by the consequences of the Covid-19 pandemic. The strict lockdown (involving closures of schools and all nonessential businesses) implemented in March 2020 to limit the spread of the virus was lifted gradually from May onwards, but economic sentiment plummeted from 112 points in January 2020 to 74.5 points in April 2020 (the lowest reading since 2013) and has only increased by 9 points since then (as of August 2020), with negative effects on investment and private consumption. GDP fell by 11.9 per cent year-on-year in the second quarter of 2020, as the measures to reduce contagion brought virtually to a halt some of the main drivers of the economy, such as construction and tourism. Since then, these sectors have only partially re-started their activities.
The government responded with a set of measures to mitigate the negative impact of the crisis on the economy and vulnerable groups, but these measures will take a heavy toll on public finances. Public debt had fallen below 100 per cent as a ratio of GDP at end-2019, but is likely to be above that ratio again by end-2020 because of falling output and government revenues and increased crisis-related spending. GDP is expected to fall by 7.5 per cent in 2020 as a whole, rebounding somewhat by 4.0 per cent in 2021 provided social distancing is phased out and the main sectors of the economy continue their steady recovery.

Cyprus in the EBRD’s 2020-21 Transition Report

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