Cyprus has a small, predominantly service-based economy, with tourism, financial services and shipping all counting amongst its important sectors. The small country initially withstood the economic crisis that began in 2008 relatively well, but experienced a major economic downturn in 2012. Employment rates dropped in almost all sectors, notably in manufacturing and construction between 2008 and 2013. The unemployment rate remains well above the EU average.
Looking to the future, employment is projected to continue grow over the period to 2025 but is expected to remain below its pre-2008 financial crisis levels. Most employment growth will be in distribution and transport, and most job opportunities will open in elementary occupations. Cyprus is forecast to experience an increase in demand for high- and low-skilled workers, whilst demand for medium-skilled workers will decrease. Over the same period, the share of Cyprus’ labour force with high level qualifications is projected to increase, whilst the share of workers with medium, low or no qualifications is set to decrease.
Cyprus’ working-age population (15-64) is forecast to increase in the medium-term future, with labour market participation remaining at the same level, above the projected EU average. Looking to the longer-term future, Cyprus’ old-age dependency ratio is expected to remain consistently below than the EU28 average.