Cyprus Economic Outlook
December 23, 2021A 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 GrowthThe 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%.
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Cyprus Economic News
January 7, 2022
Consumer prices fell 0.25% in December, contrasting November’s 0.54% increase.
December 30, 2021
Industrial output increased 1.7% compared to the same month a year earlier in October, which followed September's 2.4% increase.
December 2, 2021
Consumer prices rose 0.54% in November, cooling from the 0.73% increase in October.
November 30, 2021
A second reading of national accounts data revealed that GDP growth lost steam in the third quarter, falling to 5.5% year-on-year (preliminary estimate: +5.2% yoy) from 13.1% in the second quarter. Private consumption increased 3.3% in the third quarter, which was below the second quarter's 14.7% expansion.
November 29, 2021
Industrial production decreased 1.2% year-on-year in September (August: +8.9% yoy).