Cyprus is expanding a bilateral labour agreement with Egypt to include more sectors as the island struggles with a growing shortage of both skilled and unskilled workers.
Labour Minister Marinos Mousiouttas met with his Egyptian counterpart in Cairo this week to restructure a June 2024 Memorandum of Understanding that had previously seen low interest from Cypriot employers. The updated agreement will now cover tourism, construction, IT, and the recycling industry.
The move comes as the Cypriot economy continues a strong growth trajectory. Revised data from the Statistical Service shows GDP grew by 3.8% in 2025, driven by information technology, hospitality, and construction. The International Monetary Fund (IMF) projects growth will remain steady at 3% for 2026.
Construction and Tourism Face Pressure
The construction sector remains the hardest hit, with the Federation of Building Contractors Associations (OSEOK) warning that understaffing threatens productivity and public infrastructure projects. OSEOK President Stelios Gavriel estimated that the industry requires at least 5,000 additional workers, ranging from labourers and drivers to civil engineers.
In the hospitality sector, hoteliers’ associations PASYXE and STEK report a need for approximately 4,000 employees. While the conflict in the Middle East has temporarily frozen the Israeli market—Cyprus’s second-largest tourism source—officials expect demand for labour to rebound quickly once regional tensions ease.
Tech and Retail Gaps
The technology sector, which now contributes 14% to the national GDP, is facing a critical lack of specialised talent. A recent PwC Cyprus survey revealed that 43% of CEOs view the shortage of skilled workers as a major threat, particularly in the field of Artificial Intelligence.
The retail sector is also grappling with roughly 2,500 vacancies. PASYLE President Marios Antoniou noted that the upcoming opening of two new shopping centres in Limassol—the “Limassol Mall” and “The Mall of Limassol”—will create an immediate demand for another 1,000 staff members.