articles | 19 January 2016

Cyprus' growth forecast upgraded

International forecasters have upgraded their forecasts for growth in Cyprus in 2016, according to the latest Bloomberg consensus survey.

The average real GDP growth rate expected by forecasters is 1.9% in 2016 – an upward revision from the 1.4% expected in the previous survey.

However, they are more cautious about next year, expecting growth of 2% in 2017, compared with 2.2% in the previous survey.

The most recent survey took place last week and the start of the year has been bumpy one for global markets.

Deflation ends

The forecasters also expect deflation to come to an end in 2016. While harmonized consumer prices fell by 1.2% in 2015, they are expected to increase by 0.8% in 2016 (same as previous survey) and 1.3% in 2017 (compared with 1.5% previously).

Unemployment is projected to continue its downward trend according to the Bloomberg survey, from 15.6% in 2015 to 14.9% in 2016 and 14% in 2017.

The budget is expected to remain in balance for 2016 (0% deficit) and post a surplus of 1% of GDP in 2017, while the current-account deficit, which reflects imports and exports of goods and services, is expected to reach 4.6% of GDP in 2016 and 4.1% in 2017.

Source: InCyprus

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