Cyprus: Second release confirms softer GDP growth in the third quarter
A second reading of national accounts data revealed that GDP growth lost steam in the third quarter, falling to 5.5% year-on-year (preliminary estimate: +5.2% yoy) from 13.1% in the second quarter.
Private consumption increased 3.3% in the third quarter, which was below the second quarter’s 14.7% expansion. Public spending grew at the slowest pace since Q2 2020, expanding 3.9% (Q2: +14.7% yoy). Meanwhile, fixed investment contracted 9.7% in Q3, marking the worst reading since Q2 2020 (Q2: +60.9% yoy).
Growth in exports of goods and services accelerated to 20.4% year-on-year in the third quarter, which marked the best reading since Q1 2021 (Q2: +11.2% yoy). Conversely, growth in imports of goods and services waned to 2.6% in Q3 (Q2: +23.8% yoy).
On a working-day and seasonally-adjusted quarter-on-quarter basis, economic growth remained stable at Q2’s 1.5% in Q3.
Commenting on the outlook for growth, analysts at the EIU said:
“We forecast growth of 4.0% in 2022, the year in which we expect real GDP in Cyprus to return to its 2019 pre-pandemic level, along with most other European economies. Growth rates will then normalise to an average of 2.9% in 2023–26. Over the medium term, growth will also be supported by the EU Recovery and Resilience investment plan, under which Cyprus is set to receive EUR 1 billion in grants and EUR 200 million in loans in 2021–26—and potentially an additional EUR 1.1 billion in private investment.”