Cyprus unemployment hits 3.6 per cent as housing costs and skills shortages threaten growth

Cyprus' unemployment rate fell to a historic low of 3.6 per cent of the labour force in the second quarter of 2026, according to the Central Bank of Cyprus' October 2026 Economic Brief. Marios Polemidiotis of the CBC's Economic Analysis and Monetary Policy Division said employment continues to expand, inflows of foreign workers remain significant and labour force participation among Cypriots stays high, despite successive shocks since the pandemic including the energy crisis and inflation. The report warns that demographic changes, housing costs and skills shortages could increasingly constrain the labour market and the economy's longer-term growth prospects. The CBC describes the labour market as a key indicator of resilience, closely linked to growth, productivity and social welfare.