A further deterioration was recorded in Cyprus’ net position of Foreign Direct Investment (FDI) in 2024, which remained in negative territory, as the decline in outward FDI exceeded the reduction in inward FDI.

Specifically, according to a report published on Thursday by the Central Bank of Cyprus (CBC), the net FDI position in 2024 stood at -€41,864.0 million, compared with -€34,856.7 million in 2023.

More analytically, the stock of outward FDI reached €331,752.1 million in 2024, down from €366,000.2 million in 2023.

According to the CBC, this decline is mainly attributed to a reduction in debt instruments, while equity instruments recorded a marginal decrease. The majority of outward FDI stocks in 2024 consisted of equity instruments (89%), and to a lesser extent debt instruments (11%).

The composition of outward FDI has not shown any significant changes over time, as equity instruments continue to represent the main component of this category.

The stock of inward FDI amounted to €373,616.1 million in 2024, compared with €400,857.0 million in 2023. This development was driven by a decrease in equity instruments, despite an increase in debt instruments.

As regards the composition of inward FDI in 2024, it consisted of 94% equity instruments and 6% debt instruments.

According to the CBC report, net FDI transactions remained negative in 2024. Specifically, net FDI transactions stood at -€5,111.2 million, as the negative level of outward FDI transactions exceeded the also negative level of inward FDI transactions.

Outward FDI transactions in 2024 amounted to -€22,466.8 million, of which -€26,107.7 million related to equity instruments excluding reinvested earnings, and -€4,471.6 million to debt instruments.

In contrast to other components, the CBC notes that reinvested earnings were positive, reaching €8,112.5 million.

Inward FDI transactions in 2024 amounted to -€17,355.6 million, of which -€44,757.4 million originated from equity instruments excluding reinvested earnings.

On the other hand, total transactions in reinvested earnings (€14,278.7 million) and debt instruments (€13,123.1 million) were both positive, partially offsetting the aforementioned decline.

Furthermore, according to the CBC, net FDI income remained negative in 2024—meaning that income from inward FDI exceeded income from outward FDI—and stood at -€3,427.9 million, compared with -€2,621.8 million in the previous year.

Income from outward FDI amounted to €25,869.3 million in 2024, up from €24,394.8 million in 2023.

Income attributable to inward FDI reached €29,297.2 million in 2024, compared with €27,016.5 million in 2023.

The stock of both inward and outward FDI in Cyprus is spread across all continents, with Europe remaining the dominant partner.

Outward FDI stocks directed to Europe amounted to €202,635.7 million in 2024, down from €227,570.2 million in 2023.

The second most significant destination was America, with outward investment valued at €60,040.4 million, down from €67,374.5 million in 2023.

As regards the euro area and the European Union (excluding the United Kingdom), the share of FDI directed to these country groups in 2024 stood at 18.1% and 22.2%, respectively.

In terms of inward FDI, the CBC notes that inflows originate primarily from Europe and, to a much lesser extent, from America.

More specifically, inward FDI stock from Europe reached €295,287.2 million in 2024, down from €321,342.4 million in 2023. Inward FDI from America—the second most significant continent for inward FDI—stood at €73,150.9 million, recording a slight decrease compared with €74,117.6 million in 2023.

Outward FDI is mainly directed towards the tertiary sector, according to the CBC.

Specifically, outward FDI stock in the tertiary sector amounted to €216,010.3 million in 2024, compared with €255,597.5 million in the previous year.

The largest share of investment in the tertiary sector was directed towards financial and insurance activities. Investment in the primary and secondary sectors reached €55,593.4 million in 2024, up from €47,682.9 million in 2023. It is noted that €60,148.4 million of outward FDI in 2024 remains unallocated, meaning it cannot be attributed to a specific economic activity.

Similarly, the majority of inward FDI stock in Cyprus was channelled into the tertiary sector.

According to the CBC, inward FDI stock in the tertiary sector amounted to €367,348.8 million in 2024, down from €395,197.3 million in 2023. Most investments in this sector were directed towards financial and insurance activities, reflecting Cyprus’ specialisation in the provision of financial services.

Investment in the primary and secondary sectors totalled €508.4 million in 2024, compared with €611.8 million in 2023.

According to the CBC, when Special Purpose Entities (SPEs) are treated as non-residents, Cyprus’ net FDI position deteriorates further.

Specifically, the adjusted net FDI position in 2024 stood at -€50,280.9 million, compared with -€42,696.2 million in 2023.

Adjusted outward FDI stock reached €24,702.8 million in 2024, while adjusted inward FDI stock amounted to €74,983.6 million during the same year.

The CBC notes that data classifying SPEs as non-residents show substantially lower FDI stocks compared with data where SPEs are treated as residents.

“Similar to the case where SPEs are classified as residents, the majority of adjusted inward FDI stocks were channelled into the tertiary sector,” the CBC states. Specifically, adjusted inward FDI stocks in the tertiary sector reached €70,148.9 million in 2024, while adjusted inward FDI in the primary and secondary sectors amounted to €580.4 million.

Adjusted outward FDI was also mainly directed towards the tertiary sector (€13,751.0 million in 2024), and to a lesser extent towards the primary and secondary sectors (€1,589.7 million). An amount of €9,361.5 million remains unallocated by economic activity.