Cyprus Economic Outlook
May 31, 2022A flash estimate revealed that GDP grew 0.7% quarter-on-quarter in Q1, an identical pace to Q4 2021. While a detailed breakdown is not yet available, the services sector likely supported activity thanks to lower unemployment and reduced Covid-19 restrictions. Moreover, industrial output gained steam in January–February in annual terms. Turning to Q2, momentum is likely easing as food and energy price hikes due to the Ukraine War take their toll. Business and consumer confidence plummeted in April, boding poorly for consumption and private investment in the second quarter. While the recent lifting of all remaining travel restrictions will benefit the tourism sector, the reliance on Russian tourists will prevent the sector’s full recovery. Finally, in May the EU Commission recommended focusing on reducing non-performing loans and mitigating climate change risks.
Cyprus Economic GrowthGrowth is expected to slow this year due to the Ukraine war, with soaring inflation affecting private consumption and Russian tourism inflows dampened: Russia represented around 20% of tourist revenues in 2016–2019. However, a tighter labor market and the fading impact of the pandemic should soften the slowdown in household spending. FocusEconomics analysts see GDP growing 3.0% in 2022, which is unchanged from last month’s forecast. In 2023, our panel sees the economy expanding 3.3%.
Cyprus Economy Data
5 years of Cyprus economic forecasts for more than 30 economic indicators.
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Cyprus Economic News
September 1, 2022
GDP growth lost momentum, falling to 5.8% year on year in the second quarter, from 6.2% in the first quarter.
August 18, 2022
Consumer prices rose by 1.24% in July, picking up from the 0.78% increase recorded in June.
August 17, 2022
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.
July 28, 2022
Industrial output rose 5.3% year on year in May (April: +2.2% yoy).
July 18, 2022
Consumer prices rose 0.78% over the previous month in June, which was below May's 0.92% rise.