Cyprus Economic Forecast

Cyprus Economic Outlook

September 28, 2021

A second estimate confirmed that GDP rebounded strongly in Q2, largely owing to a bounce-back in household consumption and a marked acceleration in fixed investment. Positive momentum appears to have carried over into Q3: A significant decline in the unemployment rate at the outset of the quarter, coupled with improving economic sentiment in July–August, hints at firming consumer spending. On top of this, goods exports jumped in July and the number of tourist arrivals soared in the same month. In other news, in mid-September the finance minister presented the draft 2022 budget to the cabinet. The plan sees spending at EUR 7.9 billion—similar to last year’s budget—and rests on a fiscal deficit forecast of 5.1% of GDP. Meanwhile, on 9 September the country received EUR 157 million—the first tranche of its allocation of the EU’s recovery fund—boding well for activity ahead.

Cyprus Economic Growth

GDP is seen expanding at a healthy pace this year, in line with the reopening of economies globally. Next year, a recovering tourism industry should buoy exports, while additional EU recovery fund disbursements should support domestic activity. The uncertain trajectory of the pandemic poses a key downside risk to the outlook. FocusEconomics analysts see GDP growing 4.4% in 2021. In 2022, our panel sees the economy expanding 4.1%, which is unchanged from last month’s forecast.

Cyprus Economy Data

2015 2016 2017 2018 2019
Population (million)0.80.80.90.90.9
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 %)3.46.84.44.13.2
Consumption (annual variation in %)2.84.44.53.33.0
Investment (annual variation in %)-0.248.924.1-6.60.1
Exports (G&S, annual variation in %)9.97.28.74.62.0
Imports (G&S, annual variation in %)8.19.012.82.41.5
Industrial Production (annual variation in %)4.810.37.76.63.2
Retail Sales (annual variation in %)-  5.26.25.43.2
Unemployment Rate14.913.011.18.47.0
Fiscal Balance (% of GDP)-1.00.32.0-3.71.7
Public Debt (% of GDP)10810393.910195.5
Inflation Rate (HICP, annual variation in %, eop)-0.60.1-0.41.00.7
Inflation Rate (HICP, annual variation in %)-1.6-1.20.70.80.6
Inflation (PPI, annual variation in %)-5.1-4.23.42.32.2
Policy Interest Rate (%)-  -  -  -  -  
Exchange Rate (vs USD)-  -  -  -  -  
Exchange Rate (vs USD, aop)1.111.111.131.181.12
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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