Cyprus has a service-based economy with some light manufacturing that is open, free, and competitive. Cyprus markets its geographic location as a “bridge” between East and West, as well as its educated English-speaking populace, low local expenses, good aircraft connections, and telecommunications, on an international level.
Cyprus has had a solid economic record since attaining independence from the United Kingdom in 1960, as evidenced by rapid growth, full employment, and relative stability. The colonial economy’s weak agrarian economy has been turned into a modern economy with thriving services, industrial, and agricultural sectors, as well as advanced physical and social infrastructure. Cypriots are among the wealthiest people in the Mediterranean, with a GDP per capita of more than $29,000 in nominal terms and $42,000 in purchasing power parity in 2021.
The country’s “extremely high” Human Development Index reflects its excellent standard of living, and Cyprus is placed 23rd in the world in terms of Quality-of-Life Index. The Cypriot economy, however, fell in 2009 after more than three decades of uninterrupted development. This underlined Cyprus’ vulnerability during the Great Recession and the European debt crisis. Concerns have recently been expressed concerning the status of the public finances and rising borrowing costs. Furthermore, the Evangelos Florakis Naval Base explosion in July 2011 delivered a major hit to Cyprus’ economy, with an estimated cost of 13 billion, or up to 17% of GDP.
What will Cyprus’ GDP be in 2021?
According to Trading Economics global macro models and analysts, GDP of Cyprus is predicted to reach 23.50 USD billion by the end of 2021. According to our econometric models, the GDP of Cyprus is expected to trend at 24.80 USD billion in 2022.
What is Cyprus’ main source of income?
Given the severe economic and social upheaval caused by the Turkish invasion in 1974 and Turkey’s continued control of the northern portion of the island, Cyprus’ economic successes over the previous decades have been considerable. The Turkish invasion hit the Cypriot economy hard, especially agriculture, tourism, mining, and quarrying: 70 percent of the island’s wealth-producing resources were lost, the tourist industry lost 65 percent of its hotels and tourist accommodations, the industrial sector lost 46 percent, and mining and quarrying lost 56 percent of production. Additional setbacks were the closure of Nicosia International Airport in the buffer zone and the loss of the port of Famagusta, which handled 83 percent of general cargo.
The establishment of a market-oriented economic system, the government’s pursuit of good macroeconomic policies, the existence of a dynamic and flexible entrepreneurship, and a highly educated work force have all been credited with Cyprus’ economic success. Furthermore, extensive collaboration between the public and private sectors boosted the economy.
The economy has changed from agriculture to light industry and services in the last 30 years. The services sector, which includes tourism, accounts for about 80% of GDP and employs more than 70% of the workforce. Agriculture accounts up 2.1 percent of GDP and 8.5 percent of the labor force, whereas industry and construction account for about one-fifth of GDP and manpower. The main export crops are potatoes and citrus. Following the strong growth rates of the 1980s (average annual increase of 6.1 percent), the 1990s saw varied results: real GDP growth of 9.7% in 1992, 1.7 percent in 1993, 6.0 percent in 1994, 6.0 percent in 1995, 1.9 percent in 1996, and 2.3 percent in 1997. This pattern highlighted the economy’s sensitivity to fluctuations in tourist arrivals (i.e., economic and political conditions in Cyprus, Western Europe, and the Middle East), as well as the necessity to diversify the economy. Until structural reforms are made, declining competitiveness in tourism and, particularly, manufacturing is projected to be a drag on GDP. Prior to the euro’s adoption in 2008, the overvaluation of the Cypriot pound kept inflation in control.
The island is not self-sufficient in food and had few known natural resources until the recent offshore gas discoveries, therefore commerce is critical to the Cypriot economy, and the trade deficit continues to expand. Fuels, most raw materials, heavy machinery, and transportation equipment must all be imported by Cyprus. More than half of its trade is with the rest of the European Union, particularly Greece and the United Kingdom, while 20% of exports go to the Middle East. Cyprus enacted a value-added tax (VAT) in 1991, which is now at 19 percent as of January 13, 2014. In 1995, Cyprus accepted the new World Trade Organization (WTO) accord (General Agreement on Tariffs and Trade, or GATT), and on January 1, 1996, it began fully implementing it. The EU membership talks began on March 31, 1998, and ended in 2004 when Cyprus became a full member of the organization.
Is Cyprus a wealthy nation?
The Greek zone’s residents are among the world’s wealthiest. Cyprus is ranked 16th in terms of per capita income adjusted for purchasing power in the World Bank’s Development Report. According to the CIA World Factbook, per capita income in 1988 was US$15,500.
According to the Republic of Cyprus, 97 percent of residences in Cyprus are in good or medium condition, with 69 percent of those houses having electricity and plumbing. There is no information available on the percentage of the people living in poverty. According to a May 2000 editorial in the Sunday Mail, a Greek Cypriot weekly, 70,000 individuals in the Greekzone (about 10% of the population) live in poverty and need on government assistance. The Republic of Cyprus responded with plans to give homes to low and middle-income persons after the Turkish invasion of 1974 displaced approximately 25,000 people. By 1995, the government announced that 14,000 housing units, including schools, commercial centers, and playgrounds, had been built, and that 12,000 people had taken advantage of available subsidies to build their own homes.
The per capita income in the Turkish zone fell to roughly $5,000.
Cyprus’s government estimates that
Why is Cyprus so prosperous?
The government-controlled portion of the Republic of Cyprus has a market economy dominated by the services sector, which accounts for more than four-fifths of GDP. The most important services have always been tourism, finance, shipping, and real estate. Cyprus has been a member of the European Union since May 2004, and in January 2008, it adopted the euro as its official currency.
Cyprus’ economy grew at an average of 4% per year during its first five years as a member of the EU, with unemployment hovering around 4% between 2004 and 2008. However, the economy entered a recession in 2009, as the tourism and construction sectors were affected hard by the growing global financial crisis and resulting poor demand. The decline was aided by an overextended banking sector with excessive exposure to Greek debt. Cyprus’ two major banks were among Europe’s largest holders of Greek bonds, with a significant presence in Greece via bank branches and subsidiaries. Cyprus lost access to international capital markets in May 2011 after a series of credit rating downgrades. Cyprus became the fifth euro-zone government to ask the European Commission, European Central Bank, and International Monetary Fund – collectively known as the “Troika” – for an economic bailout program in July 2012.
Shortly after President Nikos ANASTASIADES was elected in February 2013, Cyprus secured an agreement with the Troika on a $13 billion bailout, which resulted in a two-week bank closure and the introduction of capital controls, which lasted until April 2015. The combined entity was recapitalized by converting some large bank deposits to shares and imposing losses on bank bondholders. The Troika, like other EU countries, tied the bailout to financial and structural changes as well as the privatization of state-owned firms. Despite shrinking and restructuring, Cyprus’ financial industry continues to be plagued with the euro zone’s highest pool of non-performing loans, accounting for over half of all loans. Cyprus has received favourable Troika assessments and has exceeded fiscal targets since the bailout, but it has struggled to overcome political opposition to bailout-mandated legislation, particularly over privatizations. Non-performing loans (NPLs) remain at a high rate of roughly 49%, and growth would be accelerated if Cypriot banks could speed up the resolution of NPLs.
A US-Israeli collaboration finished early evaluations of hydrocarbon deposits in Cyprus’ exclusive economic zone (EEZ) in October 2013, estimating gross mean reserves of roughly 130 billion cubic meters. Despite the fact that exploration in Cyprus’ EEZ continues, no more economically exploitable reserves have been discovered. The government’s economic recovery efforts depend on developing offshore hydrocarbon resources, although development has been hampered by regional developments and debates over exploitation methods.
What is Europe’s poorest country?
**The transcontinental countries of Azerbaijan ($4,214) and Armenia ($4,268) would feature on the above list if they were counted as European countries rather than Asian countries.
Ukraine
Ukraine is the poorest country in Europe as of 2020, with a per capita GNI of $3,540. Ukraine was once the USSR’s second-largest economy. When the USSR fell apart, Ukraine struggled to adapt to a market economy, leaving a large portion of the population in poverty. Government corruption, Russian aggression (particularly, Russia’s unlawful invasion of Crimea in 2014), and a lack of infrastructure are all factors contributing to Ukraine’s poverty.
Georgia
Georgia’s GDP per capita in 2020 was $4,290, which was lower than any other European country save Ukraine. This former Soviet republic, which is located between Russia, Turkey, Armenia, and the Black Sea, is going through some difficult times. Its future, on the other hand, appears to be promising. Georgia’s economy and Human Development Index (HDI) score are both improving as a result of changes such as significant financial reforms, reduced corruption, and significant government investment in education.
Kosovo
Kosovo had a per capita GNI of $4,440 in 2020, making it the third poorest country in Europe, assuming it is a sovereign country and not an independent Serbian territory for the sake of discussion. Kosovo is a semi-autonomous province of Serbia that declared independence in 2008. Around 550,000 people live in poverty in Kosovo, which means that 30 percent of the population earns less than the poverty threshold. Furthermore, Kosovo’s unemployment rate is extraordinarily high, at 34.8 percent as of 2016, with the majority of households earning less than 500 Euros per month.
Moldova
Moldova, with a GNI per capita of $4,570 in 2020, is one of Europe’s poorest countries. Following the dissolution of the Soviet Union in 1991, Moldova endured political instability, economic decline, trade barriers, and other problems. Lack of large-scale industrialization, food insecurity, economic collapse during the transition to a market economy, and social policy blunders, among other things, all contribute to poverty in the country. Despite its recent difficulties, Moldova is improving, with the percentage of the people living in poverty falling from 30.2 percent to 9.6 percent between 2006 and 2015.
Albania
Albania’s Gross National Income (GNI) per capita is $5,210. Albania transitioned from a socialist to a capitalist market economy following the dissolution of the Soviet Union in the 1990s. Despite being Europe’s fifth poorest country, its economy is steadily growing. Albania’s vast natural resources, such as oil, natural gas, and minerals such as iron, coal, and limestone, are largely responsible for this.
North Macedonia
North Macedonia is Europe’s sixth poorest country. North Macedonia suffered major economic transformation after winning independence in 1991, and its economy has progressively improved. Around 90% of the country’s GDP is derived from trade. Despite the government’s successful implementation of programs, North Macedonia still has a high unemployment rate of 16.6%. The unemployment rate reached 38.7% at its peak. In 2020, North Macedonia’s per capita GNI was $5,720.
Bosnia and Herzegovina
Bosnia and Herzegovina’s GNI per capita in 2020 was $6,090. The country is currently recovering from its own war for independence from Yugoslavia, which lasted from early 1992 until December 1995. The conflict, as well as the ethnic cleansing that accompanied it, caused devastation on the people, infrastructure, and economy of the country. When the battle stopped, there were so many casualties that one out of every four houses was headed by a woman. Women make up a smaller percentage of the workforce in Bosnia and Herzegovina, and they are generally paid less than men, putting many families at a disadvantage. As a result, many families were forced to live in poverty.
Belarus
Following the dissolution of the Soviet Union, Belarus, like other former Soviet republics, had economic difficulties. Belarus had a strong economy and one of the highest living standards among Soviet republics in previous years. Belarus suffered economic difficulties over the next few years, until 1996, when it began to recover. Belarus’s spending among the bottom 40% of the population climbed between 2006 and 2011, when many nations in Europe were feeling the consequences of the recession. The country’s per capita GNI is expected to be $6,330 in 2020.
Serbia
Serbia’s per capita GDP is expected to be $7,400 in 2020. Serbia had eight years of economic expansion at the start of the 2000s, until the worldwide recession in 2008. Serbia’s economy entered a recession in 2009, resulting in negative growth rates of -3 percent in 2009 and -1.5 percent in 2012, pushing the country’s public debt to 63.8 percent of GDP. Around a quarter of the Serbian population is poor. Food and energy production, on the other hand, are thriving, and Serbia’s economic situation is improving.
Montenegro
The Gross National Income (GNI) per capita in Montenegro is $7,900. Montenegro’s economy is modest and mainly reliant on the oil sector. The country’s natural resources have been depleted as a result of urbanization and deforestation, making it vulnerable to resource depletion. Furthermore, discrimination based on gender and age results in significant economic disparities, notably for women. Approximately 50,000 people have been internally displaced or are refugees. They are among the poorest people in the country, with a poverty rate almost six times higher than the national average of 8.6%.
How healthy is Cyprus’ economy?
Cyprus’ economy has a score of 72.9, ranking it as the 23rd most free in the 2022 Index. Cyprus is placed 16th out of 45 European countries, and its overall score is higher than the regional and global norms. In 2020, Cyprus’ economic development slowed, but it recovered in 2021.
What makes Cyprus famous?
The Limassol carnival, wreck diving (the Zenobia wreck), Haloumi cheese, and Commandaria, a sweet dessert wine from Cyprus, are all well-known in Cyprus. Background: Cypriot culture is one of the Mediterranean’s oldest. The island was ruled by the Assyrians, Egyptians, Persians, Greeks, and Romans in that order.
What is Cyprus’ primary export?
Citrus fruits, cement, potatoes, textiles, and pharmaceuticals are the most common exports from Cyprus. The European Union is Cyprus’ largest and most important trading partner, accounting for 50% of all Cypriot trade flows, followed by the Middle East, which accounts for 20% of Cyprus’ exports.
What does Cyprus have to offer?
Grapes, deciduous fruits, potatoes, cereal grains, vegetables, olives, and carobs are among the principal crops grown in the Greek Cypriot sector. The majority of the country’s citrus fruits, wheat, barley, carrots, tobacco, and green fodder are grown in the Turkish-controlled territory.