Cyprus Economic Forecast

Cyprus Economic Outlook

November 21, 2017

The economy grew healthily in seasonally- and working-day adjusted terms in Q3 (+0.9% quarter-on-quarter and +3.9% year-on-year), buttressed by a booming tourism sector. The ongoing boom resulted in lower unemployment in September, extending a downward trend started in November of last year. Tourist arrivals broke another record in October as the sector showed no signs of slowing down. Moreover, economic sentiment showcased a broad-based improvement in the same month on the back of optimistic views on past sales and sales expectations. Fitch Ratings noted the positive momentum in late October when it upgraded the country’s default rating from BB- to BB due to improving government finances. It noted, however, that the banking sector remains fragile and poses a key risk to Cyprus’ credit profile.

Cyprus Economic Growth

GDP growth is expected to remain robust next year, although it is seen moderating slightly. The FocusEconomics Consensus Forecast panel projects growth of 2.9% in 2018, which is up 0.3 percentage points from last month’s estimate. For 2019, growth is seen at 2.5%.

Cyprus Economy Data

Population (million)
GDP per capita (EUR)22,62220,90120,51320,82321,110
GDP (EUR bn)19.518.117.617.617.9
Economic Growth (GDP, annual variation in %)-3.2-6.0-
Consumption (annual variation in %)-1.3-
Investment (annual variation in %)-20.5-12.9-17.512.026.0
Exports (G&S, annual variation in %)-
Imports (G&S, annual variation in %)-4.4-
Industrial Production (annual variation in %)-18.7-
Retail Sales (annual variation in %)-  -
Unemployment Rate11.915.916.214.913.1
Fiscal Balance (% of GDP)-5.6-5.1-8.8-1.20.4
Public Debt (% of GDP)79.3102107108108
Inflation Rate (HICP, annual variation in %, eop)1.5-1.3-1.0-0.60.1
Inflation Rate (HICP, annual variation in %)3.10.4-0.3-1.6-1.2
Inflation (PPI, annual variation in %)6.6-2.1-2.9-  -  
Policy Interest Rate (%)0.750.250.05-  -  
Exchange Rate (vs USD)1.321.381.21-  -  
Exchange Rate (vs USD, aop)1.291.331.33-  -  
Current Account (% of GDP)-5.6-4.5-4.5-3.6-5.0
Current Account Balance (EUR bn)-1.1-0.8-0.8-0.6-0.9
Trade Balance (EUR billion)-4.3-3.2-3.7-3.4-4.4

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Cyprus Facts

Exchange Rate1.180.65 %Dec 06
Stock Market71.4-0.44 %Dec 06

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