Household debt down to 55 per cent of GDP, says Central Bank of Cyprus

The Central Bank of Cyprus (CBC) announced on Friday that Cyprus’ household and corporate debt levels continued to decline in the second quarter of 2025, as both sectors benefited from higher economic growth and stronger balance sheets.

According to the CBC’s quarterly financial accounts, which cover the period ending June 2025, household debt stood at €19.70 billion, equivalent to 55 per cent of GDP.

This marks a slight decrease compared with the previous quarter, mainly due to the rise in gross domestic product.

Compared with December 2016, the household debt-to-GDP ratio has fallen sharply by around 62 per cent, underscoring a steady trend of deleveraging over recent years.

At the same time, non-financial corporations recorded debt of €40 billion, representing 112 per cent of GDP. This also reflects a marginal quarterly decline, again partly linked to economic expansion.

Since December 2016, the debt ratio of non-financial corporations has dropped by 94 per cent, highlighting significant progress in private sector balance sheet repair.

The report also detailed the composition of household and corporate assets.

According to the CBC, household financial assets totalled €62.80 billion at the end of June 2025, with 54 per cent held in cash, deposits, and loans, 25 per cent in shares, 3 per cent in debt securities, and 18 per cent in other financial instruments.

For non-financial corporations, total financial assets reached €74.30 billion, with 20 per cent in cash and deposits, 6 per cent in loans, 0.6 per cent in debt securities, 41 per cent in shares, and 32 per cent in other financial assets.

The CBC also provided a breakdown of financial positions across the insurance, investment, and pension sectors.

The assets of insurance companies amounted to €5.80 billion, of which 7 per cent was held in cash and deposits, 2 per cent in loans, 28 per cent in debt securities, 46 per cent in shares, and 17 per cent in other financial instruments.

Investment funds held €7.10 billion in financial assets, with 5 per cent in cash and deposits, 14 per cent in loans and debt securities, 79 per cent in shares, and 2 per cent in other financial holdings.

Meanwhile, pension funds recorded total investments of €4.80 billion, comprising 15 per cent in cash and deposits, 14 per cent in loans, 7 per cent in debt securities, 55 per cent in shares, and 10 per cent in other assets.