Cyprus is experiencing ‘solid economy recovery’ according to the European Commission
The European Commission (EC) predicts growth of 2.5% in 2017 with inflation projected to be moderately positive.
According to the EC winter forecast, Cyprus is experiencing sound economy recovery with growth expected to continue and remain vigorous. The EC forecasts growth of 2.5% in 2017 and 2.3% in 2018 (2.8% in 2016). Inflation is expected to be moderately positive in 2017 and float at around 1.2% in 2017 and 1.1% in 2018.
The labour market is also expected to do well, with employment estimated to have increased by 2.7% in 2016 and is expected to grow by 2.2% in 2017 and an additional 1.8% in 2018 with unemployment declining by 12% in 2017 and 11% in 2018.
In a real sign of the general wellbeing and improvement of the Cyprus economy, by 2018 the debt is expected to be below 100%. For 2016, the debt stood at 107.4%, and it is expected to fall to 103.2 in 2017.
The budget of 2017 will show a deficit of -0.2% and notably, in 2018 and 2019 it is projected that it will show a surplus of 0.4%.
According to the University of Cyprus Economic Research Centre, forecasts for growth are much higher at 3.1%. While this figure is slightly more enthusiastic than the EC’s forecast of 2.5%, what is important is that all outlooks for Cyprus’s economy remain positive, with Cyprus really expected to grow and flourish as of 2017 and in the coming years.
The Cyprus Economic Research Centre report credits this growth to the robust Gross Domestic Product and employment growth experienced in the third quarter of 2016 as well as the moderate growth in the EU. Further, the normalisation of the domestic banking sector has greatly contributed to the stability of the economy and forecasts for further growth in 2017 and 2018.
The tourism industry, one of the largest sectors in Cyprus, has outperformed forecasts for 2016 and is expected to grow even further in 2017, with revenue generated from tourism in 2016 alone estimated to have surpassed €2.3 billion.
Undoubtedly, the Cyprus economy has come a long way in a relatively short period since the 2013 banking crisis. The banking system has since stabilised, public finances are on a healthy track and the Government has regained access to the markets.
It is then not much of a surprise that all reports, while varying slightly in their predictions, expect the Cyprus economy to grow and flourish in 2017 onwards.