Cyprus GDP Q2 2022

Cyprus

Cyprus: Economic growth moderates in the second quarter

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. The deceleration was due to a tough base of comparison.

Private consumption growth edged down to 7.6% year on year in Q2 from a 7.9% expansion in Q1, and public spending growth softened to 1.0% in Q2 (Q1: +1.7% yoy). Meanwhile, fixed investment rebounded, growing 31.8% in Q2, contrasting the 11.2% decrease in the prior quarter.

On the external front, exports of goods and services growth accelerated to 19.2% in Q2 (Q1: +14.6% yoy). In addition, imports of goods and services growth picked up to 23.2% in Q2 (Q1: +9.7% yoy), marking the best reading since Q2 2021.

On a working-day and seasonally-adjusted quarter-on-quarter basis, economic growth waned notably to 0.6% in Q2, following the previous period's 1.3% growth. Q2's reading marked the slowest growth since Q2 2021.

Turning to Q3, the economy is likely being supported by a rebounding tourism sector amid the lessening effects of Covid-19 and the lifting of travel restrictions in June. However, a sizeable decline of Russian visitors due to EU sanctions will prevent tourism from fully recovering. In addition, high inflation should constrain private consumption and investment.

FocusEconomics panelists project the economy to expand 3.4% in 2022, which is up 0.3 percentage points from last month's forecast. In 2023, the panel sees GDP growing 2.8%.


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Cyprus GDPH Q2  2022 1

Note: Year-on-year changes of GDP in %.
Source: Central Statistics Bureau and FocusEconomics Consensus Forecast.


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