Insider Business EU sees Cyprus economy expanding by 3.6% in 2018

EU sees Cyprus economy expanding by 3.6% in 2018

The European Commission on Thursday said it expected the Cyprus economy to grow by 3.6% in 2018, on the back of a nine year high of 3.9% in 2017.

In its summer economic forecast it said that in the first quarter of 2018, the economy had continued its momentum, posting 3.8% (y-o-y) growth driven by solid domestic demand and, lately, exports.

It said consumer sentiment continued to improve, while business confidence across major sectors either increased or levelled off, suggesting continued momentum in the coming quarters.

The composition of growth shifted somewhat in early 2018: investment, after breaking an historic high in the last quarter of 2017, fell in the first quarter of this year. Goods exports, by contrast, more than doubled compared to the previous quarter.  Shipping acquisitions moderated, while ship sale/deregistration reached record high levels. Excluding shipping activity, the underlying trends remained broadly stable and this compositional shift is expected to be temporary, says the EC.

Furthermore, according to the European Commission, exports of services were subdued in the first quarter of the year, but “this soft patch is likely to be overcome in the quarters ahead thanks to the marked increase in tourist arrivals already recorded in the spring months as well as the completion of new hotels for tourists.”

The Forecast also shows that private consumption continues to expand, supported by rapidly rising employment and gradually increasing wages, while survey data reveal that hiring is set to continue strongly in the near future, giving a further boost to disposable income.

Finally, the Commission states that “Cyprus’ struggling financial sector, which has been a drag on the economy since the crisis years, is consolidating” and “once finalised, the sale of the second largest bank, Cyprus Co-operative Bank, is expected to reduce uncertainties surrounding the macroeconomic outlook.”

Overall, real GDP growth is expected to reach 3.6% in 2018 and 3.3% in 2019, unchanged since the spring.

Inflationary pressures remain weak. HICP inflation dropped during the first four months of the year and turned positive only in May.

The decrease in prices was rather broad-based, reflecting strong competition among retailers in several sectors and subdued wage dynamics. HICP inflation is expected to be positive for the year as a whole due to increasing services and energy prices and it is expected to pick up further in 2019, mainly as a result of higher oil prices and the gradual build-up of domestic price pressures amid rapid economic recovery.

Top Stories

Access to Troodos controlled by Police

The Police announced that on the basis of the Health Ministry decrees aiming to contain the outbreak of the pandemic, tomorrow Sunday, access to...

129 new cases, four deaths announced on Saturday

The Health Ministry announced the death of four persons due to COVID-19. This raises the death toll from the virus in Cyprus to 183,...

Crowding at Troodos; lots of fines by police

Lots of traffic was today seen at Troodos. In order to maintain order but also to monitor that people respected the measures aiming to...

Where to get antigen rapid tests on Sunday 24 January

The Health Ministry announced the following antigen rapid test sites for Sunday, 24 January 2021:   LIMASSOL Parking place Lidl supermarket, Limassol 08:30-16:30 Glafkos Clerides Park, Germasoyia 08:30-16:30 Municipal...

Larry King dies at 87

Larry King dies at 87. Photo taken at his concert at Hard Rock Live in Hollywood, Florida on January 25, 2012. (Reuters)


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...


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...