On Thursday, August 28, the Central Bank of Cyprus released its latest data on loans and deposits for July 2025. According to the report from the country's primary financial institution, public demand for loans and deposits has decreased.
Slowdown in lending activity
Although the total volume of loans in Cyprus increased by €74.9 million in July, this growth was significantly lower than in the previous four months. For comparison, the increases were €672.3 million in June, €116.8 million in May, €169.1 million in April, and €429.9 million in March. Interestingly, the market recorded a slight decline in loans (-€7.2 million) in July 2024, a year ago.
According to the Central Bank of Cyprus, the annual lending growth rate reached 7.2%, up from 6.8% in June. By the end of July, the total volume of loans in the country was €26.5 billion. During this period, loans to households increased by €19.7 million, while financing for companies decreased by €45.8 million.
Sharp decline in deposits
After three months of strong deposit growth, total deposits declined in July. The net decrease was €154.5 million, contrasting with June's growth of €654.7 million. Nevertheless, deposits grew by 6.5% year over year. The total deposit balance in July 2025 was €56.6 billion.
A notable decline in deposits occurred in some domestic sectors of the economy, amounting to €257.6 million. This decline occurred despite increases in deposits from households (+€62.6 million) and non-financial companies (+€105.3 million).
Economic Context and Outlook
Economists note that the slowdown in lending activity in Cyprus is due to seasonal factors and more cautious banking policies amid global economic uncertainty. At the same time, demand for mortgage loans remains stable, while businesses continue to take a cautious approach to borrowing.
The decline in deposits may be due to seasonal withdrawals to finance vacations and major summer purchases, as well as the gradual shift of some depositors to investment instruments.
According to analysts' forecasts, lending growth may recover in fall 2025, particularly in the corporate sector, due to infrastructure and tourism projects.