As reported by ServPRO the European Commission’s spring economic forecast expects growth in the island of Cyprus to keep progressing through the years 2016 (1.6%) and 2017 (2%), while the debt to Gross Domestic Product (GDP) ratio is expected to drop to 105.4% in 2017 with the budget retaining a positive balance of 2.2% in 2016 and 2.4% in 2017, as presented last Tuesday by EU Commissioner Piere Moscovici.
According to the Commissioner, risks remain under control and export growth is expected to strengthen even further in 2016 and 2017. Tourism growth in 2015 has already extended into the first quarter of 2016, partly due to geopolitical tensions in neighboring countries, and the labor market is improving with moderate wage growth. He also noted that, “oil prices continue to remain low and are forecast to weigh further on energy prices in 2016, due to base effects. Excluding the more volatile components such as energy and unprocessed food, consumer prices are forecast to decline marginally in 2016.”
The Cypriot economy came out of the recession in 2015, with real GDP growth at 1.6%, due to stabilized household spending and declining consumer prices which allowed households to consume more in real terms, providing a significant boost to real GDP growth, said Mr. Moscovici. As per EU Commission’s spring forecast though, real GDP growth is forecast to remain mostly unchanged in 2016 before picking up to 2% in 2017, mainly because the support from declining consumer prices and the weaker euro is expected to fade away.
Read more on the website ServPRO.