Cyprus Economic Forecast

Cyprus Economic Outlook

January 29, 2019

Available data for the fourth quarter of last year paints a mixed picture, but overall suggests the economy should have registered another quarter of healthy expansion. This followed a firm third quarter, driven by buoyant household spending and upbeat construction investment. On the upside, annual growth in tourist arrivals was stronger in Q4 than in the previous quarter, while business confidence was especially buoyant, which bodes well for investment activity in the final quarter. Less positively, the unemployment rate increased in November for the second consecutive month, and consumer confidence remained stuck in negative territory throughout the quarter, which suggests cooling household spending.

Cyprus Economic Growth

Growth is set to slow this year, but it should nevertheless remain solid thanks to sturdier fixed investment. Private consumption will likely continue to expand, although at a softer pace due to higher inflation and slowing job creation. A hard Brexit, burdensome private and public debt, and a high—albeit declining—stock of non-performing loans cloud the outlook. Met the why particular analysts see growth at 3.2% in 2019, which is unchanged from last month’s forecast, and 2.6% in 2020.

Cyprus Economy Data

Population (million)
GDP per capita (EUR)20,94820,52020,94721,48522,525
GDP (EUR bn)18.117.617.718.219.2
Economic Growth (GDP, annual variation in %)-5.9-
Consumption (annual variation in %)-
Investment (annual variation in %)-12.9-17.613.635.027.8
Exports (G&S, annual variation in %)
Imports (G&S, annual variation in %)-
Industrial Production (annual variation in %)-13.4-
Retail Sales (annual variation in %)-  -  -  5.26.0
Unemployment Rate15.916.214.913.011.1
Fiscal Balance (% of GDP)-5.1-9.0-
Public Debt (% of GDP)11311811811797.5
Inflation Rate (HICP, annual variation in %, eop)-1.3-1.0-0.60.1-0.4
Inflation Rate (HICP, annual variation in %)0.4-0.3-1.6-1.20.7
Inflation (PPI, annual variation in %)-2.1-2.9-5.1-4.23.4
Policy Interest Rate (%)
Exchange Rate (vs USD)1.381.
Exchange Rate (vs USD, aop)1.331.331.111.111.13
Current Account (% of GDP)-4.9-4.3-1.5-4.9-6.7
Current Account Balance (EUR bn)-0.9-0.8-0.3-0.9-1.3
Trade Balance (EUR billion)-3.2-3.6-3.4-4.4-5.3

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Cyprus Facts

Exchange Rate1.140.65 %Jan 30
Stock Market61.9-0.44 %Jan 30

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