Insider Economy European Commission forecasts 2.9% growth for Cypriot economy in 2019

European Commission forecasts 2.9% growth for Cypriot economy in 2019

The Cypriot economy is expected to grow by 2.9% in 2019 and 2.6% in 2020, according to the summer forecast of the European Commission (EC) published today.

Cyprus’ real GDP expanded by a solid 3.9% in 2018, driven by strong domestic consumption and still favourable external demand for Cypriot exports. Economic growth slowed in the first quarter of 2019 to 3.4%, reflecting weaker exports.

“Consumer sentiment has deteriorated over the first half of 2019 and business confidence has steadied, suggesting that growth could be less buoyant in the months to come. Private consumption is nevertheless expected to remain resilient, given positive labour market developments,” the EC said.

The unemployment rate fell to 6.5% in May, its lowest level in eight years. Public spending is also set to provide support. Investment recorded healthy growth in the first quarter of the year and bank lending to domestic non-financial companies is firming.

Tourism problems

One of the main factors that lead to the slowing down of the Cypriot economy’s growth is the decline in tourist arrivals.

According to the EC: “one of the pillars of the Cypriot economy – tourism – is showing signs of weakness. Tourist arrivals decreased by 1.1% over the first five months of 2019 compared to the same period in 2018. This interruption in a long upward trend partially reflects the bankruptcy of certain airlines servicing Cyprus, as well as slowing tourism demand. But revenue from tourism in the first quarter also is estimated to have fallen, by 3.1% compared to the corresponding period in 2018, likely due to more intense competition.”

Overall, real GDP is projected to grow by 2.9% in 2019 and 2.6% in 2020. Slowing tourism and escalating trade tensions globally are likely to weigh on export revenues and investment decisions, leading to a more moderate growth than expected in spring.


HICP inflation remains low. After a more pronounced rise in January when it breached 2% year-on-year, HICP fluctuated around 1% in the period February-April and then eased in May. The major factor behind low inflation were prices of non-energy goods, which continued falling compared to a year ago.

The contribution of most other HICP components, by contrast, was positive. Lower oil prices, however, are set to drive inflation down in
the second half of 2019 to an annual rate of 0.5% and inflation is expected to average 0.9% in 2020.

Previous articleHouse prices up by 4.3%
Next articleVEGAN FAM Festival

Top Stories

Ten new corona virus cases detected out of 2,619 tests

According to the Epidemiological Surveillance Unit of the Ministry of Health 10 new cases of the SARS-CoV-II virus were detected out of a total...

Fine of €6,500 in a bar in Paphos for violating decrees

The Paphos District Court imposed a fine of €6,500 on Monday, on a property owner for violating the decree of the Law on Disinfection. Specifically,...

Toxic chemicals removed from site of accident in Nikou Pattichi St.

Fire Service members on Monday morning rushed to the busy Nicos and Despinas Pattichi Avenue in central Limassol where a barrel in a van...

Cyprus and Russia agree to amend Double Tax Treaty

Cyprus and Russia agreed on Monday to amend the Cyprus-Russia Double Tax Treaty, as Minister of Finance Constantinos Petrides wrote in a post on...

Greek Foreign Ministry calls on Turkey to stop its illegal actions

The Greek Foreign Ministry sent a clear message that Greece will defend it sovereignty and its sovereign rights and called on Turkey to immediately...


Octopus ‘Kathisto’ (or Octopus braised in Wine)

Ingredients: 1/2 cup Greek extra virgin olive oil 2 medium onions, chopped fine 1 large octopus, about 2kg (cleaned and kept whole) 3/4 cup dry red wine 1/3 cup...

Homemade lemonade

Ingredients: 1 cup lemon juice 1 cup sugar Method: Thoroughly wash the lemons with soap and warm water. Roll each lemon with the palm of your hand, pressing...

‘Striftaria’ mini cheese pies

Ingredients 1 ½ cup milk 2 tbsps. flour 4 tsps. of butter 3 eggs, slightly beaten + 1 extra with 1 tbs. of milk for spreading 1 pack of...

Mini potato canapes baked on salt

Ingredients Serves: 12 1kg small Cypriot potatoes rock salt, as needed 250g salted butter 300ml full fat cremé frâiche 1 pot cod or salmon roe Method Prep:20min › Cook:35min › Ready in:55min Take...