The Cypriot economy is experiencing steady growth in labour costs. According to new data from the Statistical Service, the hourly cost of labour increased by 4.1% in the second quarter of 2025 compared to the same period in 2024. This indicator considers both wages and company expenses that are not directly related to labour costs.
Impact on earnings and business
The main drivers of this growth are a 4.2% increase in wages and daily rates, as well as a 4.1% rise in additional employer costs. For employees, this means higher incomes, while for companies, it means the need to review budgets and human resource management strategies.
Seasonal fluctuations and market dynamics
Taking seasonal adjustments into account, overall growth was 1% compared to the previous quarter. Both wages and other employer costs exhibited similar trends. Economists note that the growth in labour costs in Cyprus reflects not only inflationary trends, but also structural changes in the labour market where demand for skilled professionals continues to grow.
Outlook for the economy
Analysts predict that further increases in labour costs could affect the competitiveness of Cypriot companies, particularly those focused on exporting services and operating in the tourism industry. However, rising wages also support domestic consumption, which has a positive effect on the country's economy as a whole.