Cyprus household debt falls to €20bn as corporate debt reaches €41.7bn

Cyprus household debt stood at €20 billion, equivalent to 53 per cent of gross domestic product (GDP), at the end of June 2026, while debt among non-financial companies reached €41.7 billion, or 111 per cent of GDP, according to figures released on Friday by the Central Bank of Cyprus (CBC). The figures show that household indebtedness has fallen by 65 per cent since December 2016, while the debt-to-GDP ratio of non-financial companies has declined by 95 per cent over the same period, pointing to a substantial reduction in borrowing across both sectors. Despite the improvements, corporate debt remained considerably higher than household debt, with non-financial companies carrying liabilities equivalent to more than the value of the country’s annual economic output. The CBC reported that household financial assets totalled €67.1 billion at the end of June 2026, considerably exceeding their outstanding debt. Cash, deposits and loans accounted for 54 per cent of these assets, while shares represented 25 per cent, other financial assets 17 per cent and debt securities the remaining 4 per cent. The figures provide an overview of the financial position of households, businesses and institutional investors, including insurance companies, investment funds and pension funds. For non-financial companies, financial assets reached €77.9 billion at the end of June, with shares accounting for the largest portion at 37 per cent. Other financial assets represented 33 per cent of the total, while cash and deposits accounted for 24 per cent, loans for 5 per cent and debt securities for 0.6 per cent. Meanwhile, the sector’s outstanding debt amounted to €41.7 billion, with its debt-to-GDP ratio standing at 111 per cent, representing a marginal decrease compared with the previous quarter. The CBC’s comparison with December 2016 showed that the debt-to-GDP ratio of non-financial companies had fallen by 95 per cent, indicating a substantial improvement in the sector’s indebtedness over the period. The central bank also provided a breakdown of financial assets held by insurance companies, investment funds and pension funds, highlighting the different ways in which these institutional investors allocate their holdings. Insurance companies held financial assets worth €6.5 billion at the end of June 2026, with almost half of their portfolios invested in shares. Equities accounted for 47 per cent of their financial assets, followed by debt securities at 26 per cent and other financial assets at 20 per cent. Cash and deposits represented 6 per cent of the total, while loans accounted for the remaining 2 per cent. Investment funds held €7.9 billion in financial assets, with their portfolios heavily concentrated in shares, which represented 80 per cent of their total holdings. Loans and debt securities together accounted for 13 per cent, while cash and deposits represented 4 per cent and other financial assets the remaining 3 per cent. Pension funds, meanwhile, held €5.1 billion in financial investments, with shares accounting for 59 per cent of their portfolios. Other financial assets represented 9 per cent, debt securities 6 per cent, while cash and deposits accounted for 12 per cent and loans for 13 per cent. The figures underline the significant role played by equities in the investment portfolios of insurance companies, investment funds and pension funds, although the composition of their holdings varies considerably.