Insider Economy Central Bank of Cyprus sees downside risks to the economy despite strong...

Central Bank of Cyprus sees downside risks to the economy despite strong growth

The Central Bank of Cyprus (CBC) sees certain downside risks to the Cypriot economy for the period 2020-2022, that may lead to slower economic growth, despite the positive course of economic activity, as well as the continued robust economic growth.

Non – performing loans (NPLs) which are overdue for a period of more than five years as well as various geopolitical developments such as Brexit, US-China trade war, pose potential threats for Cyprus economy for the period 2020-2022 according to Central Bank’s economic bulletin, published Monday.

According to the bulletin, the economic growth for the year that ends 2019 is projected to slow down to 3%. This percentage is expected to be a bit lower for the years of 2020-22.

As regards the developments in the banking sector CBC’s forecast shows that banks continue their efforts for fiscal consolidation due to NPLs, especially those overdue for more than five years. This percentage amounts to 46% compared to 17% in Europe.

The economic bulletin also underlines the fact that the economy is generally on a good track, however there are dangers due to macroeconomic imbalances and distortions of the past. The Central bank also underlines the fact that certain reforms in the economy and the efforts for a sound banking system are still underway.

CBC also notes that GDP recorded an increase of 3,1% for the first nine months of 2019.

“Although productivity remains low, many sectors record growth, particularly in the construction sector,” CBC adds.

Positive GDP growth had a positive impact on the labor market, while private consumption is expected to slow down due to the expected acceleration in loan repayments and the introduction of contributions to the National Health System  (GESY).

The  projected slowdown in investments is attributed to the gradual completion of investment projects (renewable energy infrastructure, marinas and the casino resort), while inflation is expected to move slightly higher in 2020 compared to 2019.

(Cyprus News Agency)

Top Stories

New measures announced by Health Minister due to increase in number of COVID-19 cases

In view of the rapid increase in the number of COVID-19 incidents observed over the last 14 days in Cyprus but also the diaspora...

Hospitals not ready to deal with second wave of pandemic

Hospitals and clinics are not ready to deal with the second wave of the pandemic due to the fact that they are understaffed, President...

Expert says three-digit numbers of COVID-19 cases to continue

The view that we will continue with three-digit figures of confirmed COVID-19 cases expressed Constantinos Tsioutis, Assistant Professor of Internal Medicine at the European...

DIKO: Dissolution of Parliament way out for government/DISY

In a statement DIKO President Nicolas Papadopoulos said DIKO does not understand how some people request the dissolution of the Parliament without setting as...

Golden Dawn leadership to be taken to jail

All of the leadership team of Golden Dawn, which has been ruled a criminal organisation, will go straight to jail as their sentences will...

Taste

Squash soup

Ingredients: 1 kg pumpkin, cut into small cubes, approximately 5 cups 2 medium (400g) sweet potatoes, cut into cubes, approximately 2 ½ cups 1 chopped leek, only...

Mezedes

No visit to Cyprus is complete without enjoying the traditional meal of many small dishes known as ‘meze’. This large feast, which has been a...

Prawns with fried cheese, barley shaped pasta

Put the barley shaped pasta into a small pan with salted water, bring to a boil and when tender, drain. Peal the prawns leaving...

Salmon and shrimp sheftalies

Mix all ingredients for tabbouli in a bowl and keep to one side so flavours can combine. Prepare the sheftalies: wash and soak the casing...