As per the latest forecast by the European statistical service (Eurostat), the economy of Cyprus is expected to show positive growth in 2016. Given the effects of the recent bail-in of March 2013, the Cypriot economy is forecasted
to recover at a remarkable pace.
It estimated that the economy will shrink by 0.5% in 2015 and will return to a modest growth of 1.4% of GDP in 2016, a very encouraging result following the financial troubles the island has had to face in the last two years. In addition, Cyprus’s current account balance is expected to improve from an estimated-3.9% in 2015 of GDP to an estimated -4.2% in 2016. Inflation is expected to climb to 0.7% (as a percentage of GDP) in 2016 from an estimated -0.2% in 2015 and -1.2% in 2014.
The graph below illustrates the GDP analysis compared quarterly with the actual GDP of the previous year.
Gdp Analysis Chart May15
The unemployment rate is now stabilising and is also expected to fall. From its peak of 16.2% to 15.2% in 2016.
Another positive announcement relates to government debt which, according to the Cyprus Central Government Debt Department of the Ministry of Finance, has decreased from €18.536 million as at the end of 2014 to €18.500 million as at 31st March 2015.
SOURCES:
• MINISTRY OF FINANCE
• EUROSTAT