12° Nicosia,
14 July, 2024

Cypriot economy maintains momentum but faces uncertainties

Strong GDP growth of 3.4% in Q1 2023, yet signs of a slowdown amid external uncertainties and restrictive monetary policy

Source: CNA

The Cypriot economy maintained a strong momentum in the first quarter of 2023 with real GDP registering an annual growth rate of 3.4%, marking however signs of a slowdown on the backdrop of the uncertain external environment and the restrictive monetary policy by the European Central Bank in a bid to place inflation under control.

According to a flash estimate released by the Statistical Service of Cyprus (Cystat), the GDP growth rate in real terms during the first quarter of 2023 is positive and it is estimated at 3.4% compared with the corresponding period last year. On a seasonally adjusted basis, GDP growth is also estimated at 3.4%.

The positive GDP growth rate is mainly attributed to the sectors Hotels and Restaurants, Transport and Storage, Information and Communication, Wholesale and Retail Trade, Repair of Motor Vehicles, Arts, Entertainment and Recreation, Other Service Activities and Financial Activities, Cystat added.

Compared with the previous quarter the Cypriot GDP expanded by 0.8% (seasonally adjusted).

Moreover, according to data released by the Statistical Service of the EU (Eurostat), Cyprus in Q1 2023 marked the second-highest annual growth rate behind Spain (3.8%).

Amid the continuing war in Ukraine, high inflation and consecutive rate hikes by the ECB, the Finance Ministry estimates that GDP growth this year will decelerate to 2.8%, from 5.6% in 2022, whereas the European Commission in its summer forecast issued yesterday said the Cypriot GDP is estimated to grow by 2.3% this year.

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