EBRD revises Cyprus’s growth forecast to 3.2%

10

By Stelios Orphanides

The European Bank of Reconstruction and Development (EBRD) said that it had revised its forecast for the Cypriot economy to 3.2 per cent for 2018 from a previous 2.5 per cent.

In 2019, economic growth is expected to slow down to 3 per cent, the EBRD said in a statement on its website on Wednesday.

“However, the legacies of the crisis, such as high public and private sector debt and a large overhang of non-performing loans (NPLs), remain important downside risks,” said the lender which has a 5 per cent stake in Bank of Cyprus and 5.4 per cent in Hellenic Bank.

The Cypriot economy which emerged in 2015 from a prolonged recession, expanded 3.9 per cent last year, the highest rate since 2008, and 3.4 per cent in 2016, allowing the unemployment rate to drop this year to a single digit for the first time in years.

The London-based bank said that last year’s growth was driven by both investment and private consumption adding that fixed capital formation exceeded one fifth of economic output last year for the first time since 2010.

“After many years of negative contribution to growth, government spending also provided a small growth boost,” it said, adding that fiscal performance remained strong last year when the government generated a budget surplus of 1 per cent of the economy.

Still, “net exports were the only drag on growth as imports, supported by rising private consumption and investments, grew by a higher rate than exports,” it said.

Share.

About Author

Stelios Orphanides is a journalist at CyprusBusinessMail.com. To contact Stelios Orphanides: [email protected]

  • Adele is back x

    Really?

    • Eye on Cyprus

      The 3.2% will be shared and enjoyed by only 1%.

  • A is B

    You have to laugh.

  • JS Gost

    Another murky smoke and mirrors organization with 3000 employees and internal spending of EUR2 billion a year (funded from 40 countries including the US and China) with very little oversight and a seriously vague mission statement. Setup to help with the dissolution of the USSR in the 90’s it now seems to be yet another self serving gravy train that uses unspecified data to make predictions and reports that help shape economics of countries, for the benefit of large corporates and seriously rich individuals, Should be held in the same esteem as ratings agencies, fortune tellers and street corner scam merchants.

  • Kevin Ingham

    Thing is if you don’t have the legal framework to wind up insolvent businesses you will always have “growth”- it’s a bit like having a “growing” population by not registering any deaths

    Let us be very clear on one thing- if Cyprus was to properly tackle the NPL’s there would be no growth whatsoever

  • Alex

    Cyprus has the sort of growth that Obama could only dream about. Maybe our Prez should get a Nobel Prize for actually doing something….

    • JS Gost

      15% of the GDP comes from selling passports and residencies. What happens when that is stopped ? Whilst Nic may be better than most of his predecessors the country’s economy is still in freefall. Cyprus has achieved a lot, but luck and circumstance has played a bigger part in this perception of ‘growth’.

      • Alex

        Try and pay a compliment without using the word “but”. It might sound a bit more sincere….

        • JS Gost

          Been here too long. I’m now as shallow as a puddle and too much of a realist. A spade is a spade in my world.

          • Alex

            Try not digging so hard – it’s a nice day……