articles | 16 July 2019

Cyprus economy weathering worsening global conditions

Cyprus’ economy is in a position to weather worsening international macroeconomics and the shrinking of the tourist flow to the island as predictions over the country’s GDP growth remain high.

Despite reappraisal of growth by international and local analysts, the Cyprus economy is expected to see a growth rate of between 3% to 3.5% in 2019. Initial predictions had the growth rate closer to 4%.

Finance Minister Harris Georgiadis foresees the growth rate for this year to be slightly below 3.5% at around 3.3% or 3.4%.

"Forecasts are to be updated in September when the annual budget is to be presented," Georgiades said.

"The medium-term target is at 3%. The growth of the Cypriot economy remains more than twice the EU average, " he told website Stockwatch.

According to estimates released by Cystat, in the first quarter of 2019, the economy grew 3.5% yoy after being seasonally adjusted, while the economy grew by 3.8% (revised figures) in the fourth quarter of 2018.

More conservative in their estimates, the EU expects to see a growth rate of 2.9% in 2019 and 2.6% in 2020, stressing the impact of the drop in tourist arrivals.

The International Monetary Fund has also revised downwards its growth estimate for the Cypriot economy in 2019 and 2020, amid worsening global macroeconomic conditions.

In the World Economic Outlook, the IMF says growth in 2019 will be 3.5% from 4.2% expected in October and in 2020 will drop to 3.3%.

International rating agencies also see a drop in the growth of the Cypriot economy, while the Cyprus  Central Bank expects to see the economy grow by 3.5% in 2019, 3.1% in 2020, while slightly picking up in 2021 to 3.2%

Source: Financial Mirror

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