Cyprus Economic Forecast

Cyprus Economic Outlook

November 20, 2018

Preliminary GDP data revealed the economy lost some steam in Q3, with annual growth edging down to a still-solid 3.6% from 3.9% in the first half of the year. The third-quarter expansion was fueled by a vibrant hotels and restaurants industry, which benefited from the record number of tourist arrivals during the summer months, primarily from the UK and Russia. On the expenditure front, private consumption seems to have cooled somewhat in Q3, as suggested by weaker retail sales growth in July–August and households turning strongly pessimistic in the quarter, likely weighing on the headline figure.

Cyprus Economic Growth

Growth is expected to moderate next year, although should remain solid on the back of healthy household spending, propped up by a strengthening labor market and supportive financial conditions. A high level of private debt and a large, albeit gradually declining, stock of non-performing loans burdening the banking system, are the main downside risks to the outlook. Met the why particular panelists project growth of 3.0% in 2019, which is down 0.1 percentage points from last month’s estimate, and 2.5% 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 Rate1.130.65 %Dec 14
Stock Market65.3-0.44 %Dec 14

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