Cyprus Economic Forecast

Cyprus Economic Outlook

July 24, 2018

Sequential data points to a continuation of robust economic activity in Q2 following a stellar Q1, which saw the economy expand at one of the fastest rates in a decade. Industrial production growth more than doubled Q1’s average pace in April on the back of soaring output of pharmaceutical and chemical products. Moreover, retail sales rose at a solid clip in the same month, underpinned by upbeat consumer confidence and an improving labor market—the unemployment rate dipped to a near seven-year low in April–May. On the external front, goods exports surged in April and May, contributing to a significant reduction of the trade deficit in January–May.

Cyprus Economic Growth

Economic growth should remain robust this year, buttressed by a dynamic tourism industry, which has benefited from increased geopolitical risks in rival tourist destinations, and healthy consumer spending aided by continued job creation. A banking system with a high non-performing loan ratio weighs on the outlook, however. Met the why particular panelists project growth of 3.6% in 2018, which is up 0.1 percentage points from last month’s estimate, and 3.0% in 2019.

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 %Aug 15
Stock Market73.8-0.44 %Aug 14

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