Insider Economy Cyprus GDP to expand by 3.5% and 3.4% in 2019 and 2020,...

Cyprus GDP to expand by 3.5% and 3.4% in 2019 and 2020, UCY’s ERC estimates

The Cypriot economy is projected to grow at robust rates in 2019 and 2020, albeit at a somewhat slower pace vis-à-vis the growth rate of 3.9% registered in 2018, University of Cyprus Economic Research Centre (ERC) said in its May Economic Outlook, while upgrading by 0.4 percentage points its earlier projection for the GDP growth in the current year.

According to the ERC, in 2019 the Cypriot economy is projected to expand by 3.5% and 3.4% in 2020, driven by the strong economic performance in Cyprus in the previous quarters, muted inflation, improving conditions in the domestic banking sector, the strong fiscal performance in Cyprus, supportive financial conditions and high levels of economic confidence.

Concerning the upward revision of the 2019 growth rate, the ERC said the uptick is mainly driven by the better-than-predicted outcome for the final quarter of 2018. The upward revision also reflects favourable developments after the third quarter of 2018, such as low inflation, strong fiscal performance and less adverse financial conditions (e.g. improved performance of international stock markets and declining spreads in the euro area).

Moreover, the ERC pointed out that the moderation in the growth momentum projected for 2019 and 2020 is mainly driven by a weaker performance of some domestic economic indicators and slower growth in the EU and the euro area reflected “in hard and soft data.”

UCY warns that downside risks to the projections are associated with slower progress with private sector deleveraging and with the reduction of non-performing loans, the high level of public debt together with the strong link between bank and sovereign risk, as well as from fiscal risks stemming from court rulings on public sector pay cuts undertaken in the context of past fiscal consolidation, the newly introduced General Health System.

Downside risks could arise from higher uncertainty surrounding the UK’s exit from the EU, weaker-than-expected growth in the UK and the euro area, and geopolitical tensions in the Eastern Mediterranean, the ERC added.

Upside risks to the outlook may stem from faster reduction in the stock of NPLs, and a higher degree of materialisation of investment plans (e.g. investments relating to tourism, property developments, energy) than that reflected in the predictors, the ERC said.

(Cyprus News Agency)

Top Stories

Global COVID death toll tops 2 million, one death every 8 seconds

  The worldwide coronavirus death toll surpassed 2 million, according to a Reuters tally, as nations around the world are trying to procure multiple vaccines...

244 new cases, out of 11,163 tests announced on Friday

The Health Ministry announced 244 new Coronavirus cases out of 11,163 PCR and rapid antigen tests on Friday, 15 January, taking confirmed infections to...

Where to get antigen rapid tests on Saturday

The Health Ministry announced the following antigen rapid test sites for Saturday, 16 January 2021:   LIMASSOL Tassos Papadopoulos building – TEPAK, Limassol 08:30-16:30 Church Agia Varvara, Zakaki...

President Anastasides to get the second dose of COVID-19 vaccine next Monday

Cyprus President, Nicos Anastasiades, will receive the second dose of the vaccine against COVID-19, next Monday at the Health Center of Latsia, according to...

Expert says milder version of pandemic likely to be present in 2022

Dr Constantinos Tsioutis, Assistant Professor, Internal Medicine & Infection Prevention and Control at the Department of Medicine of the European University Cyprus and head...

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...