Cyprus Economic Forecast

Cyprus Economic Outlook

May 3, 2022

Upbeat momentum seems to have largely carried over into Q1 2022, after GDP expanded at a quicker annual pace in Q4 2021. Industrial production gained steam in January–February compared to the fourth quarter, while the unemployment rate hit a two-year low in February, boding well for household spending. That said, the economic panorama darkened in the second half of the quarter due to the fallout from the war in Ukraine. After improving in January–February, both business and consumer confidence dove in March, hinting at softening private sector conditions. The economic situation worsened further in April, as surging energy and food prices likely capped household spending growth, while the reliance of certain industries—predominantly the tourism and professional services sectors—on Russian clients will hamper economic activity amid constraining international sanctions against Moscow.

Cyprus Economic Growth

GDP growth is expected to slow this year due to a less favorable base effect and a worsening external backdrop. The all-important tourism sector will likely take a hit due to plunging arrivals from its key Russian market, while soaring inflation bodes ill for domestic demand. More positively, a tighter labor market should soften the downturn in household spending growth. FocusEconomics analysts see GDP growing 3.0% in 2022, which is down 0.3 percentage points from last month’s forecast. In 2023, our panel sees the economy expanding 3.2%.

Cyprus Economy Data

2015 2016 2017 2018 2019
Population (million)
GDP per capita (EUR)21,04722,25623,43824,46525,050
GDP (EUR bn)17.818.920.021.121.9
Economic Growth (GDP, annual variation in %)
Consumption (annual variation in %)
Investment (annual variation in %)-0.248.924.1-6.60.1
Exports (G&S, annual variation in %)
Imports (G&S, annual variation in %)
Industrial Production (annual variation in %)4.810.
Retail Sales (annual variation in %)-
Unemployment Rate14.913.
Fiscal Balance (% of GDP)-
Public Debt (% of GDP)10810393.910195.5
Inflation Rate (HICP, annual variation in %, eop)-0.60.1-
Inflation Rate (HICP, annual variation in %)-1.6-
Inflation (PPI, annual variation in %)-5.1-
Policy Interest Rate (%)-  -  -  -  -  
Exchange Rate (vs USD)-  -  -  -  -  
Exchange Rate (vs USD, aop)
Current Account (% of GDP)-0.5-4.2-5.1-4.4-6.7
Current Account Balance (EUR bn)-0.1-0.8-1.0-0.9-1.5
Trade Balance (EUR billion)-3.2-4.2-5.0-4.7-4.7

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Cyprus Facts

Value Change Date
Exchange Rate1.120.65 %Dec 31

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