Cyprus Economic Forecast

Cyprus Economic Outlook

June 26, 2018

Comprehensive GDP data revealed the economy continued its solid recovery in Q1, growing 4.0% year-on-year on the heels of the 3.9% expansion—a nine-year high—recorded in 2017. Robust private consumption, which was buoyed by a strengthening labor market and subdued inflation, and a surge in exports, driven largely by an exceptional jump in goods exports in March, more than offset the sizeable contraction in capital spending. Meanwhile, the unemployment rate dipped to a near-seven year low in April and households turned more optimistic in April–May, boding well for further gains in consumer spending in Q2.

Cyprus Economic Growth

Although economic growth is seen moderating this year, it should remain robust overall. The ongoing recovery in household consumption, supported by continued gains in employment, and a buoyant tourism sector, which has benefited from political tensions affecting rival tourist destinations, should propel activity ahead. A banking sector with large holdings of non-performing loans continues to cloud the outlook, however. FocusEconomics panelists project growth of 3.5% in 2018, which is unchanged from last month’s estimate, and 2.8% in 2019.

Cyprus Economy Data

20132014201520162017
Population (million)0.90.90.80.80.9
GDP per capita (EUR)20,94820,52020,94721,48522,525
GDP (EUR bn)18.117.617.718.219.2
Economic Growth (GDP, annual variation in %)-5.9-1.42.03.43.9
Consumption (annual variation in %)-5.90.72.63.34.2
Investment (annual variation in %)-12.9-17.613.635.027.8
Exports (G&S, annual variation in %)2.14.35.84.03.4
Imports (G&S, annual variation in %)-4.84.67.46.810.1
Industrial Production (annual variation in %)-13.4-0.13.48.79.7
Retail Sales (annual variation in %)-  -  -  5.26.0
Unemployment Rate15.916.214.913.011.1
Fiscal Balance (% of GDP)-5.1-9.0-1.30.31.8
Public Debt (% of GDP)10310810810797.5
Inflation Rate (HICP, annual variation in %, eop)-1.3-1.0-0.60.1-0.4
Inflation Rate (HICP, annual variation in %)0.4-0.3-1.6-1.20.7
Inflation (PPI, annual variation in %)-2.1-2.9-5.1-4.23.4
Policy Interest Rate (%)0.250.050.050.00.0
Exchange Rate (vs USD)1.381.211.091.051.20
Exchange Rate (vs USD, aop)1.331.331.111.111.13
Current Account (% of GDP)-4.9-4.3-1.5-4.9-6.7
Current Account Balance (EUR bn)-0.9-0.8-0.3-0.9-1.3
Trade Balance (EUR billion)-3.2-3.6-3.4-4.4-5.3

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Cyprus Facts

ValueChangeDate
Exchange Rate1.170.65 %Jul 17
Stock Market73.6-0.44 %Jul 17

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