Cypriot Economy Shows Resilience with growth leaving EU behind

Jun 14, 2023 | Cyprus Economy

According to a flash estimate released by the Statistical Service (Cystat), Cyprus experienced positive real-term GDP growth of 3.4% in Q1 2023 compared to the previous year. The seasonally adjusted GDP growth rate also stands at 3.4%.

Quarter-on-quarter, Cypriot GDP expanded by 0.8% on a seasonally adjusted basis, reflecting a positive trend in the country’s economic performance.

The noteworthy GDP growth is primarily attributed to key sectors such as Hotels and Restaurants, Transport and Storage, Information and Communication, Wholesale and Retail Trade, Arts, Entertainment and Recreation, and Financial Activities.
Cypriot GDP slowing but leaving EU behind
Eurostat data highlights Cyprus as the second-highest annual GDP growth rate achiever in Q1, following Spain’s remarkable 3.8% growth.

In light of ongoing challenges, including the conflict in Ukraine, elevated inflation, and successive rate hikes by the ECB, the Finance Ministry anticipates a deceleration in GDP growth for 2023. The forecast predicts a decline from 5.6% in 2022 to 2.8% this year.

In its summer forecast, the European Commission estimates Cyprus’ GDP growth to reach 2.3% in 2023, reflecting a moderate expansion in the country’s economic output.

Preliminary flash estimates by Eurostat reveal that in Q1 2023, seasonally adjusted GDP in the euro area increased by 0.1%, while in the EU, it grew by 0.3% compared to the previous quarter. In Q4 2022, the euro area’s GDP remained stable, while in the EU, it experienced a 0.1% decrease.

On a year-on-year basis, seasonally adjusted GDP rose by 1.3% in both the euro area and the EU in Q1 2023, following respective growth rates of 1.8% and 1.7% in the previous quarter.

As Cyprus navigates through a dynamic economic landscape, the resilience exhibited by its GDP growth sets a positive tone. Despite challenges, the country remains committed to fostering sustainable economic development.

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