Cyprus: Economic growth slows in Q2 but remains healthy
According to a preliminary reading, GDP growth slowed to 5.8% year on year in the second quarter, from 6.2% in the first quarter.
On a working-day and seasonally-adjusted quarter-on-quarter basis, economic growth lost steam, decelerating to 0.6% in Q2, following the previous period’s 1.3% increase.
Looking at the details of the release, hotels and restaurants, transportation, retail trade and entertainment were key drivers of growth, as tourism recovered and the impact of Covid-19 faded.
Turning to Q3, the economy is expected to be sustained by a recovering tourism sector amid a milder pandemic situation and the removal of travel restrictions in June. That said, a significant drop in key Russian visitors due to EU sanctions will prevent tourism from fully rebounding. In addition, elevated inflation will likely hamper private consumption and investment.