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 underdeveloped agrarian economy inherited from colonial rule has been transformed into a modern economy, with dynamic services, industrial and agricultural sectors and an advanced physical and social infrastructure. The Cypriots are among the most prosperous people in the Mediterranean region, with nominal GDP per capita surpassing $23,000.^[1]

Their standard of living is reflected in the country's "very high" Human Development Index,^[28] and Cyprus is ranked 23rd in the world in terms of the Quality-of-life Index.^[29] However, after more than three decades of unbroken growth, the Cypriot economy contracted in 2009.^[30] This reflected the exposure of Cyprus to the Great Recession and European debt crisis. In recent times, concerns have been raised about the state of public finances and spiralling borrowing costs. 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.^[