Insider Economy Clouds gathering over Cyprus’ economy

Clouds gathering over Cyprus’ economy

Clouds are gathering over Cyprus’ economy as sectors such as tourism, consumption and services have started to shrink.

Official forecasts refer to an economic slowdown in the coming years, with the upcoming stricter regulation on shell companies leading to additional concern. Because this will significantly reduce the influx of new business in the services sector.

At the same time, tourism is suffering a blow from prevailing reduced arrivals from the United Kingdom due to uncertainly over Brexit.

The Stability Program 2019-2022 provides for a primary surplus of 5.3%, and government debt to be reduced at 95.8% from 102.5% in 2018. The growth rate is estimated at 3.6%, slightly lower compared to 2018 (3.9%), with unemployment falling to 7% (from 8.4% in 2018).

The Ministry of Finance predicts a slowdown in growth to 3% by 2022 (3.2% in 2020, 3% in 2021). Unemployment is projected to fall at 6% in 2020, 5.5% in 2021 and 5% in 2022.

The budget balance remains positive at +2.6% in 2020, +2.4% in 2021 and +2.2% in 2022, with primary surpluses steady above 4%: 4.6% in 2020, 4.4% in 2021 and 4.1% in 2022. Government debt is set to fall to 95.8% in 2019, 89.1% in 2020, 83% in 2021, and 77.6% in 2022.

However, the latest Economic Outlook of the University of Cyprus Economics Research Centre shows the negative signals accumulating around the island’s economy.

With the exception of the manufacturing and construction sectors, indicators are close to that of last semester which was low. The state of play is particularly negative in consumption, both among consumers and retail trade businesses.

At the same time, the International Monetary Fund has revised downward its forecast for economic growth. It says growth in 2019 will be at 3.5% from 4.2% expected in October and 3.3% in 2020.

The European Commission also forecasts a slowdown. GDP growth, it noted, is expected to reach 3.3% in 2019 and 2.7% in 2020.

 

Read more:

https://in-cyprus.com/president-reiterates-commitment-to-maintaining-conditions-for-high-economic-growth/

 

 

Top Stories

Mainly fine, temperatures at 37 C inland

    Temperatures will remain below 40 C inland today offering some respite from the extreme heat of recent days, but are set to rise again...

New Covid-19 case from repatriations, total now 1004

  One person, a repatriating Cypriot who travelled from the US, has tested positive for coronavirus, bringing the total number of cases to 1004, the...

Lakkotrypis: Moratorium in EEZ would signal end of Cyprus’ energy prospects

    A moratorium on hydrocarbon activities in the exclusive economic zone (EEZ) of the Republic of Cyprus, due to Cyprus settlement efforts or ongoing Turkish...

Israel reimposes series of restrictions after coronavirus spike

    Israel reimposed on Monday a series of restrictions to fight a spike in coronavirus infections, including the immediate closure of bars, night clubs, gyms...

Moody’s: Payment holidays shield banks in 2020, deterioration very likely in 2021

    The high level of loan payment holiday in Cyprus may shield the banks in 2020 but suggests that asset quality deterioration is “still very...

Taste

Cyprus sprouts with cream and prosciutto

In a big, deep frying pan, fry the prosciutto in the olive oil, on medium heat for 2 minutes. Add the onion and garlic...

Pork burger with sundried tomatoes, mozzarella and anchovies

Mix all the ingredients together with the mince in a bowl, and combine well. Divide into 4 balls and form the burgers. Warm a griddle/pan...

Sheftalies

Wash the lamb cauls with plenty of cold water and let them settle in water and vinegar for a little while. Soak the bread crumbs...

Loukaniko Pitsilias – Pitsilia Sausage

Pitsilia sausage is produced in the Pitsilia region from pork minced meat that is “cooked” ( matured) in the dry red wine of the...