Cyprus Economic Outlook
October 27, 2020Available data suggests that the economic panorama remained subdued in Q3, following the unprecedented GDP drop in Q2. On the external front, tourist arrivals nosedived by more than 80%, on average, in Q3, while merchandise exports dropped markedly in July–August, as Covid-19 continued to suppress foreign demand. On the domestic side, consumers turned only marginally less pessimistic in Q3 compared to Q2—the peak of the health crisis—while the unemployment rate rose in August, likely dragging on household consumption. Moving to Q4, a spike in new Covid-19 infections prompted the government to introduce new restrictions in mid-October, boding ill for recovery at the tail-end of the year. More positively, on 2 October, Fitch Ratings affirmed the country’s BBB- credit rating with a stable outlook, citing its solid governance, strong institutions and sound fiscal policy.
Cyprus Economic GrowthGDP is seen dropping at the sharpest pace since 2013 this year, before rebounding in 2021 on the back of recovering domestic and foreign demand, and supported by EU funding. However, the unpredictable course of the pandemic, uncertainty around Brexit negotiations, with the UK being a major trading partner, and the country’s significant public debt load, cloud the outlook. FocusEconomics analysts see GDP growing 4.5% in 2021, which is down 0.4 percentage points from last month’s forecast. In 2022, our panel sees the economy expanding 4.0%.
Cyprus Economy Data
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Cyprus Economic News
February 26, 2021
Following Q3’s notably softer drop, GDP contracted at a slightly sharper rate in the final quarter of 2020, likely dragged down by the reintroduction of Covid-19 restrictions, including a nationwide curfew that started in late November and was kept in place for the remainder of Q4.
February 25, 2021
Industrial production contracted 0.9% year-on-year in December, falling at a weaker rate than November’s 3.6% slide and logging the best result since February.
February 4, 2021
Consumer prices dropped 1.06% over the previous month in January, down from December’s 0.70% drop and logging the lowest reading in nine months.
January 28, 2021
Industrial output slid 4.1% compared to the same month a year earlier in November 2020, falling at a weaker rate than October's 5.2% decrease.
January 7, 2021
Consumer prices slid 0.70% over the previous month in December, contrasting November’s 0.47% rise, and logging the first drop since July.