[1][30] Cyprus adopted the euro as its official currency on 1 January 2008, replacing the Cypriot pound at an irrevocable fixed exchange rate of CYP 0.585274 per €1.

[37][38] The remaining €2.7 billion of the ESM bailout was never dispensed, due to the Cypriot government's better than expected finances over the course of the programme.

Internationally, Cyprus promotes its geographical location as a "bridge" between East and West, along with its educated English-speaking population, moderate local costs, good airline connections, and telecommunications.

Since gaining independence from the United Kingdom in 1960, Cyprus has had a record of successful economic performance, reflected in strong growth, full employment conditions and relative stability.

The Cypriots are among the most prosperous people in the Mediterranean region, with GDP per capita in 2024 approaching $38,000 in nominal terms and $60,000 on the basis of purchasing power parity.

Furthermore, Cyprus was dealt a severe blow by the Evangelos Florakis Naval Base explosion in July 2011, with the cost to the economy estimated at €1–3 billion, or up to 17% of GDP.

The loss of the port of Famagusta, which handled 83 percent of the general cargo, and the closure of Nicosia International Airport, in the buffer zone, were additional setbacks.

Declining competitiveness in tourism and especially in manufacturing are expected to act as a drag on growth until structural changes are effected.

More than 50% of its trade is with the rest of the European Union, especially Greece and the United Kingdom, while the Middle East receives 20% of exports.

[42] In the years following the dissolution of the Soviet Union it gained great popularity as a portal for investment from the West into Russia and Eastern Europe,[43] becoming for companies of that origin the most common tax haven.

More recently, there have been increasing investment flows from the West through Cyprus into Asia, particularly China and India, South America and the Middle East.

[44] Following the 2022 Russian invasion of Ukraine, Cyprus businesses and individuals have come under scrutiny and criticism for allowing EU and US sanctions to be breached with belated attempts to stop them or bring the culprits to justice.

A number of professional law and accounting firms have been identified as helping Russian Oligarchs evade sanctions.

[45][46][47][48] In January 2024, during a Council of Europe Parliamentary Assembly, Cypriot President Nikos Christodoulides maintained that Cyprus had fully implemented all European Union sanctions against Russia.

[54] Several production sharing contracts for exploration were signed with international companies, including Eni, KOGAS, TotalEnergies, ExxonMobil and QatarEnergy.

[56] Its geographical position at the crossroads of three continents and its proximity to the Suez Canal has promoted merchant shipping as an important industry for the island nation.

The Cyprus Tourism Organization has a status of a semi-governmental organisation charged with overseeing the industry practices and promoting the island worldwide.

[65] In June 2012 the Cypriot finance minister, Vassos Shiarly, stated that the European Central Bank, European Commission and IMF officials are to carry out an in-depth investigation into Cyprus' economy and banking sector to assess the level of funding it requires.

The Ministry of Finance rejected the possibility that Cyprus would be forced to undergo the sweeping austerity measures that have caused turbulence in Greece, but admitted that there would be "some negative repercussion".

[66] In November 2012 international lenders negotiating a bailout with the Cypriot government have agreed on a key capital ratio for banks and a system for the sector's supervision.

[68] In 2015, Cyprus was praised by the President of the European Commission for adopting the austerity measures and not hesitating to follow a tough reform program.

The economy mainly revolves around the agricultural sector and government service, which together employ about half of the work force.

The ECJ decided that only goods bearing certificates of origin from the internationally recognized Republic of Cyprus could be imported by EU member states.

The de facto authorities have instituted a free market in foreign exchange and permit residents to hold foreign-currency denominated bank accounts.

[76] In a study published in 2005,[77] citizens from a sample of countries were asked to rate how happy or unhappy they were as a whole on a scale of 1 to 7 (Ranking: 1.

[78] The report rates 156 countries based on variables including income, healthy life expectancy, social support, freedom, trust, and generosity.

Economic factors play a significant role in the general life satisfaction of Cyprus citizens, especially with women who participate in the labor force at a lower rate, work in lower ranks, and work in more public and service sector jobs than the men.

[80] Women participate in this industry through jobs like hotel work to serve and/or bring pride to their family, not necessarily to satisfy their own selves.

[83] Another finding is that being a full-time housewife has a stronger negative effect on happiness for women of Northern Cyprus than being unemployed, showing how the combination of gender and the economic factor of participating in the labor force affects life satisfaction.

[84] As found in this study, citizens of Cyprus that live in its capital, Nicosia, are significantly less happy than others whether or not socio-economic variables are controlled for.