According to new Eurostat data, almost 18% of consumer spending by Cypriot households goes toward housing, water, electricity, and fuel. This figure confirms the persistently high financial burden on family budgets, especially after the sharp rise in energy and rental prices in previous years. Despite government support measures and some stabilization in the real estate market, utility payments remain one of the largest household expenses on the island.
A slowdown in consumption amid faster growth in the EU
Overall consumer spending dynamics in Cyprus in 2024 show a slowdown. Annual growth reached 3.6%, compared to 6.1% in 2023. This contrasts with the overall acceleration of consumption in the European Union, where the indicator rose to 1.5% in the EU and 1.3% in the eurozone. Economists link this to the fact that Cypriot households have already felt the effects of past inflation and are adjusting their behavior, managing their budgets more cautiously.
Cyprus in the context of European trends
The highest increase in consumption among EU countries in 2024 was recorded in Malta (8.8%), Romania (5.6%), and Hungary (5.3%). Finland was the only country where consumption declined (-0.5%). Against this backdrop, Cyprus' indicators remain moderate yet stable, indicating a gradual adaptation of consumers to the new economic reality.
Main spending categories of Cypriot households
Housing and utilities remain the largest expense category for Cyprus residents, accounting for 17.8% of total consumption. Although this level is lower than in the Czech Republic (32.1%), Finland (29.6%), or Denmark (28.5%), it is still very significant for local households.
Spending on food and non-alcoholic beverages in Cyprus amounts to 12.5%, which is lower than in Romania (23.1%) or Bulgaria and Latvia (20.1%), but higher than in Luxembourg (9.3%) and Ireland (9.8%).
Transport expenses reach 12.9%, comparable to Greece (13.1%) and somewhat lower than Slovenia (17%). This spending structure reflects the characteristics of the Cypriot market: the lack of a developed public transport system and the population’s heavy reliance on private cars.
Impact of spending on the Cypriot economy
Household consumption in Cyprus amounts to 61.6% of GDP, making the country the fourth highest in the EU in terms of the share of household spending in the economy. Only Greece (75.3%), Croatia (70.5%), and Portugal (61.6%) rank higher. This high figure highlights the central role of private consumption in supporting economic activity on the island, where tourism and domestic trade remain key sectors.