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Cyprus Economy Profile 2019

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Economy - overview

The area of the Republic of Cyprus under government control has a market economy dominated by a services sector that accounts for more than four-fifths of GDP. Tourism, finance, shipping, and real estate have traditionally been the most important services. Cyprus has been a member of the EU since May 2004 and adopted the euro as its national currency in January 2008.

During the first five years of EU membership, the Cyprus economy grew at an average rate of about 4%, with unemployment between 2004 and 2008 averaging about 4%. However, the economy tipped into recession in 2009 as the ongoing global financial crisis and resulting low demand hit the tourism and construction sectors. An overextended banking sector with excessive exposure to Greek debt added to the contraction. Cyprus’ biggest two banks were among the largest holders of Greek bonds in Europe and had a substantial presence in Greece through bank branches and subsidiaries. Following numerous downgrades of its credit rating, Cyprus lost access to international capital markets in May 2011. In July 2012, Cyprus became the fifth euro-zone government to request an economic bailout program from the European Commission, European Central Bank and the International Monetary Fund - known collectively as the "Troika."

Shortly after the election of President Nikos ANASTASIADES in February 2013, Cyprus reached an agreement with the Troika on a $13 billion bailout that triggered a two-week bank closure and the imposition of capital controls that remained partially in place until April 2015. Cyprus' two largest banks merged and the combined entity was recapitalized through conversion of some large bank deposits to shares and imposition of losses on bank bondholders. As with other EU countries, the Troika conditioned the bailout on passing financial and structural reforms and privatizing state-owned enterprises. Despite downsizing and restructuring, the Cypriot financial sector remains burdened by the largest stock of non-performing loans in the euro zone, equal to nearly half of all loans. Since the bailout, Cyprus has received positive appraisals by the Troika and outperformed fiscal targets but has struggled to overcome political opposition to bailout-mandated legislation, particularly regarding privatizations. The rate of non-performing loans (NPLs) is still very high at around 49%, and growth would accelerate if Cypriot banks could increase the pace of resolution of the NPLs.

In October 2013, a US-Israeli consortium completed preliminary appraisals of hydrocarbon deposits in Cyprus’ exclusive economic zone (EEZ), which estimated gross mean reserves of about 130 billion cubic meters. Though exploration continues in Cyprus’ EEZ, no additional commercially exploitable reserves have been identified. Developing offshore hydrocarbon resources remains a critical component of the government’s economic recovery efforts, but development has been delayed as a result of regional developments and disagreements about exploitation methods.

GDP (purchasing power parity)
$31.78 billion (2017 est.)
$30.59 billion (2016 est.)
$29.58 billion (2015 est.)

note: data are in 2017 dollars

GDP (official exchange rate)
$21.7 billion (2017 est.)
GDP - real growth rate
3.9% (2017 est.)
3.4% (2016 est.)
2% (2015 est.)
GDP - per capita (PPP)
$37,200 (2017 est.)
$36,100 (2016 est.)
$34,900 (2015 est.)

note: data are in 2017 dollars

Gross national saving
13.7% of GDP (2017 est.)
11.9% of GDP (2016 est.)
12.8% of GDP (2015 est.)
GDP - composition, by end use
household consumption: 68.7% (2017 est.)
government consumption: 14.9% (2017 est.)
investment in fixed capital: 21.1% (2017 est.)
investment in inventories: -0.7% (2017 est.)
exports of goods and services: 63.8% (2017 est.)
imports of goods and services: -67.8% (2017 est.)
GDP - composition by sector
agriculture: 2% (2017 est.)
industry: 12.5% (2017 est.)
services: 85.5% (2017 est.)
Population below poverty line
NA
Labor force
426,600 (2017 est.)
Labor force - by occupation
agriculture: 3.8%
industry: 15.2%
services: 81% (2014 est.)
Unemployment rate
11.1% (2017 est.)
13% (2016 est.)
Unemployment, youth ages 15-24
total: 24.7%
male: 27%
female: 22.9% (2017 est.)
Household income or consumption by percentage share
lowest 10%: 3.3%
highest 10%: 28.8% (2014)
Distribution of family income - Gini index
34.8 (2014 est.)
32.4 (2013 est.)
Budget
revenues: 8.663 billion (2017 est.)
expenditures: 8.275 billion (2017 est.)
Taxes and other revenues
39.9% (of GDP) (2017 est.)
Budget surplus (+) or deficit (-)
1.8% (of GDP) (2017 est.)
Public debt
97.5% of GDP (2017 est.)
106.6% of GDP (2016 est.)

note: data cover general government debt and include debt instruments issued (or owned) by government entities other than the treasury; the data include treasury debt held by foreign entities; the data exclude debt issued by subnational entities, as well as intragovernmental debt; intragovernmental debt consists of treasury borrowings from surpluses in the social funds, such as for retirement, medical care, and unemployment

Inflation rate (consumer prices)
0.7% (2017 est.)
-1.2% (2016 est.)
Central bank discount rate
0% (31 December 2017)
0% (31 December 2010)

note: this is the European Central Bank's rate on the marginal lending facility, which offers overnight credit to banks in the euro area

Commercial bank prime lending rate
4.13% (31 December 2017 est.)
4.33% (31 December 2016 est.)
Stock of narrow money
$5.152 billion (31 December 2017 est.)
$4.174 billion (31 December 2016 est.)

note: see entry for the European Union for money supply for the entire euro area; the European Central Bank (ECB) controls monetary policy for the 18 members of the Economic and Monetary Union (EMU); individual members of the EMU do not control the quantity of money circulating within their own borders

Stock of broad money
$5.152 billion (31 December 2017 est.)
$4.174 billion (31 December 2016 est.)
Stock of domestic credit
$55.61 billion (31 December 2017 est.)
$50.84 billion (31 December 2016 est.)
Market value of publicly traded shares
$2.692 billion (31 December 2015 est.)
$4.031 billion (31 December 2014 est.)
$2.105 billion (31 December 2013 est.)
Agriculture - products
citrus, vegetables, barley, grapes, olives, vegetables; poultry, pork, lamb; dairy, cheese
Industries
tourism, food and beverage processing, cement and gypsum, ship repair and refurbishment, textiles, light chemicals, metal products, wood, paper, stone and clay products
Industrial production growth rate
13.4% (2017 est.)
Current Account Balance
-$1.458 billion (2017 est.)
-$984 million (2016 est.)
Exports
$2.805 billion (2017 est.)
$2.7 billion (2016 est.)
Exports - commodities
citrus, potatoes, pharmaceuticals, cement, clothing
Exports - partners
Libya 9.4%, Greece 7.7%, Norway 6.7%, UK 5.3%, Germany 4.1% (2017)
Imports
$7.935 billion (2017 est.)
$7.153 billion (2016 est.)
Imports - commodities
consumer goods, petroleum and lubricants, machinery, transport equipment
Imports - partners
Greece 19%, Italy 7.5%, China 7.4%, South Korea 7.3%, Germany 7%, Netherlands 5.1%, UK 5%, Israel 4.1% (2017)
Reserves of foreign exchange and gold
$888.2 million (31 December 2017 est.)
$817.7 million (31 December 2016 est.)
Debt - external
$95.28 billion (31 December 2013 est.)
$103.5 billion (31 December 2012 est.)
Stock of direct foreign investment - at home
$232.5 billion (31 December 2017 est.)
$174.5 billion (31 December 2016 est.)
Stock of direct foreign investment - abroad
$222.9 billion (31 December 2017 est.)
$175.3 billion (31 December 2016 est.)
Exchange rates
euros (EUR) per US dollar -
0.885 (2017 est.)
0.903 (2016 est.)
0.9214 (2015 est.)
0.885 (2014 est.)
0.7634 (2013 est.)
Fiscal year
calendar year

Source: CIA World Factbook
This page was last updated on December 7, 2019