Cyprus GDP
Economy grows at softest pace since Q1 2021 in Q1 2023
GDP growth slowed to 3.4% year on year in the first quarter, from 4.6% in the fourth quarter of last year. Q1’s reading marked the softest expansion since Q1 2021 and the seventh consecutive deceleration, which suggests that the base effect from Covid-19 is fading.
Household spending growth fell to 6.3% in Q1, marking the weakest expansion since Q4 2021 (Q4 2022: +8.8% yoy). Public consumption rebounded, growing 4.4% in Q1 (Q4 2022: -2.6% yoy). Meanwhile, fixed investment bounced back, growing 58.6% in Q1, likely boosted by EU recovery funds, contrasting the 2.3% decrease in the previous quarter.
On the external front, exports of goods and services contracted 0.5% in Q1, as lower merchandise exports offset higher tourism arrivals (Q4 2022: +2.7% yoy). Conversely, imports of goods and services growth sped up to 17.0% in Q1 (Q4 2022: +6.0% yoy).
On a working-day and seasonally adjusted quarter-on-quarter basis, economic growth eased to 0.8% in Q1, from the previous quarter’s 0.9% growth. Q1’s reading marked the slowest growth since Q2 2022.
Going forward, the economy is seen slowing further. The base effect of the pandemic will dissipate, while pent-up demand for tourism is likely to fade. Additionally, tighter financing conditions and still-high inflation will constrain domestic activity. On the flip side, EU recovery funds will provide support. Despite projecting a marked slowdown, our panelists expect activity to remain dynamic and the economy to expand at a faster pace than most EU countries. Energy markets and the health of the banking sector are key factors to watch.
Cyprus GDP Chart
This chart displays Economic Growth (GDP, annual variation in %) for Cyprus from 2013 to 2022.
Cyprus GDP Data
2018 | 2019 | 2020 | 2021 | 2022 | |
---|---|---|---|---|---|
Economic Growth (GDP, ann. var. %) | 5.6 | 5.5 | -4.4 | 6.6 | 5.6 |
GDP (EUR bn) | 21.7 | 23.2 | 21.9 | 24.0 | 27.0 |
Economic Growth (Nominal GDP, ann. var. %) | 6.7 | 6.9 | -5.5 | 9.7 | 12.4 |