Cyprus Economic Forecast

Cyprus Economic Outlook

May 28, 2019

Growth softened somewhat in the first quarter of the year but remained healthy overall, supported by the construction, retail and wholesale sectors. This followed a stronger increase in Q4 2018, which was buoyed by sturdy consumer spending and a jump in public expenditure. Available data suggests the economy was still in good shape at the start of the second quarter. After contracting notably in March, tourist arrivals rebounded robustly in April, coinciding with the Easter holidays, mainly on the back of higher arrivals from the UK and Israel. In the same month, the number of unemployed persons declined further, a testimony to the ongoing strength of the labor market, while consumer and business confidence also picked up slightly.

Cyprus Economic Growth

The economy is set to lose traction this year, as growth in the tourism sector moderates and debt repayment weighs on consumer spending. That said, solid wage and job gains should cushion the slowdown, while fixed investment will rebound thanks to buoyant construction activity. A no-deal Brexit and high levels of private and public debt cloud the outlook. Met the why particular analysts see growth at 3.2% in 2019, which is up 0.1 percentage points 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 Rate1.130.65 %Jun 13
Stock Market69.1-0.44 %Jun 13

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