Cyprus was pulled back from bankruptcy in a 2013 bailout by the Eurogroup and the International Monetary Fund.
It added that the only negative aspect of the interim forecast was inflation that "surprised on the downside", at 0.7 percent in 2017.
"Cyprus is experiencing a very strong recovery," EC said in its report, adding that island has "one of the fastest growing economies in the euro area."
NICOSIA, Feb. 7 (Xinhua) -- Cyprus's economy is projected to continue growing at a brisk pace this year and the next year after peaking last year, the European Commission(EC) said in a report on Wednesday.
It attributed the Cypriot economy's robust performance to strong private consumption and solid export growth, as well as some support by public consumption.
However, it forecast that inflation in 2018 is expected to climb to 1.2 percent, mainly as a result of higher oil prices, and to 1.3 percent in 2019, amid higher domestic price pressures stemming from wage dynamics.
EC's Winter Interim Economic Forecast made available in Nicosia said that the growth for 2017 will peak at 3.8 percent and will continue expanding at 3.2 percent for 2018 and 2.8 percent 2019.
The Economic Research Center of the State University of Cyprus also projected last year's growth at 3.8 percent but forecast growth for 2018 a bit higher, at 3.6 percent.