Cliff on the ocean in Cyprus

Cyprus GDP Q2 2022

Cyprus: Economic growth moderates in the second quarter

GDP growth lost momentum, falling to 5.8% year on year in the second quarter, from 6.2% in the first quarter. The deceleration was due to a tough base of comparison.

Private consumption growth edged down to 7.6% year on year in Q2 from a 7.9% expansion in Q1, and public spending growth softened to 1.0% in Q2 (Q1: +1.7% yoy). Meanwhile, fixed investment rebounded, growing 31.8% in Q2, contrasting the 11.2% decrease in the prior quarter.

On the external front, exports of goods and services growth accelerated to 19.2% in Q2 (Q1: +14.6% yoy). In addition, imports of goods and services growth picked up to 23.2% in Q2 (Q1: +9.7% yoy), marking the highest reading since Q2 2021.

On a working-day and seasonally-adjusted quarter-on-quarter basis, economic growth waned notably to 0.6% in Q2, following the previous period’s 1.3% growth. Q2’s reading marked the slowest growth since Q2 2021.

Turning to Q3, the economy is likely being supported by a rebounding tourism sector amid the lessening effects of Covid-19 and the lifting of travel restrictions in June. However, a sizeable decline of Russian visitors due to EU sanctions will prevent tourism from fully recovering. In addition, high inflation should constrain private consumption and investment.

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