Cyprus Economic Forecast

Cyprus Economic Outlook

December 23, 2021

A second release confirmed that GDP growth cooled in the third quarter, on the heels of moderating domestic activity. Household and public spending expanded at a slower pace, while capital spending contracted compared to the prior quarter. Meanwhile, exports of goods and services gained traction in the period, largely on rising numbers of tourist arrivals and easing Covid-19 cases domestically and in the region. Turning to Q4, household spending has likely waned further in the final stretch of the year, as suggested by a rising unemployment rate in October and deteriorating consumer sentiment in October–November. On top of this, elevated price pressures and tighter Covid-19 curbs from mid-December, amid rising new cases, will have also weighed on domestic activity. More positively, surging merchandise export growth in October—the joint highest in nearly three years—bodes well for the external sector.

Cyprus Economic Growth

The economy is seen expanding at a somewhat weaker rate in 2022, although the gradual lifting of Covid-19 restrictions should release pent-up demand, spurring household spending in turn. Meanwhile, recovering tourist inflows, in line with the progressing vaccination campaign, should buoy the crucial tourism industry. That said, pandemic-related uncertainty clouds the outlook. FocusEconomics analysts see GDP growing 4.1% in 2022, which is unchanged from last month’s forecast. In 2023, our panel sees the economy expanding 3.4%.

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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