12° Nicosia,
06 December, 2023

CBC lowers GDP growth projections for 2023 and 2024

Cyprus' Central Bank revises downward economic outlook for coming years


The Central Bank of Cyprus has revised its growth projections for 2023 and 2024. They now expect GDP growth to be 2.4% in 2023 and 2.7% in 2024, down from their previous forecasts of 2.6% and 2.8%. This is due to Western sanctions against Russia and the fragile external environment affecting professional and non-tourism services.

The bank maintains a 3.1% growth projection for 2025. Cyprus outperformed the Euro area with a 2.7% growth rate in H1 2023.

Economic growth will rely on local demand and investments in digitalization and green growth. Private consumption remains a key driver.

Consumer prices are expected to rise, with the harmonized consumer price index estimated at 3.9% in 2023 and 2.7% in 2024, mainly due to higher energy and food prices.

Core inflation (excluding energy and food) remains stable at 3.7% in 2023, 2.5% in 2024, and 2.4% in 2025.

Unemployment projections have improved, with rates of 6.3% in 2023 and 5.9% in 2024 (down from previous estimates by 0.4% and 0.2%, respectively). For 2025, it stays at 5.6%.

Despite challenges, Cyprus's labor market shows resilience, with unemployment falling from 6.8% in Q1 to 5.9% in Q2 2023, reflecting better-than-expected performance despite sanctions and external factors.

[Information sourced from CNA]

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