Unemployment rate drops while inflation inches up

The latest data from the Cyprus Statistical Service reveals a positive shift in the country's economic landscape, with the unemployment rate falling to 5.9% in the fourth quarter of 2023, compared to 6.9% in the same period the previous year.

The decrease in unemployment is attributed to a reduction in the number of jobless individuals, particularly among those aged 25-64. The number of unemployed in the 15-24 age group also saw a decline of 486 persons.

According to the Statistical Service, the total number of unemployed individuals stood at 29,047, constituting 5.9% of the total labor force. The breakdown shows a slight gender disparity, with a 6.0% unemployment rate for men and 5.8% for women.

In contrast to the improving unemployment figures, the employment rate for the fourth quarter of 2023 stood at 61.1%, with 462,881 persons employed. This reflects a marginal increase from the previous year when the employment rate was 61.0%.

Employment trends and sectors

The breakdown of employment by sector indicates that the Services sector holds the largest share, accounting for 81.5%. Industry and Agriculture follow with 16.0% and 2.5%, respectively. Part-time employment constituted 8.5% of total employment, with 39,124 persons engaged, showing a slight decrease from the previous year's 10.1%.

In terms of age groups, the employment rate for individuals aged 20-64 stands at 78.6%, with men at 82.4% and women at 75.0%. Notably, the employment rate for individuals aged 55-64 increased to 68.0%, up from 65.3% in the corresponding quarter of 2022.

Unemployment among youth and duration

Unemployment among young people aged 15-24 was reported at 18.6%, with men at 21.2% and women at 16.1%. The data also reveals that 57.0% of all unemployed individuals had been seeking work for less than six months, while 27.5% were categorized as long-term unemployed.

The positive employment trends align with recent developments, including the opening of a maritime humanitarian corridor to Gaza, as announced by US President Joe Biden. These economic indicators offer a glimpse of optimism for Cyprus, even as inflation sees a modest uptick.

Inflation edges up, services sector impacts consumer prices

In other economic news, Cyprus experienced a slight increase in inflation by 1.8% in February. The Consumer Price Index (CPI) rose by 1.03 units, reaching 114.93 units compared to 113.90 units in January 2024.

The change in economic origin was most notable in the Services sector, recording a 3.7% increase. The effects on the CPI were also evident in the categories of Restaurants and Hotels (6.2%) and Food and Non-Alcoholic Beverages (2.7%).

While the uptick in inflation is a positive sign for economic recovery, it remains below the European Central Bank's target of 2% inflation in the euro area. Cyprus continues to navigate through economic challenges, with these latest statistics providing insights into the ongoing recovery and areas of focus for sustained growth.

Source: CNA