IMF predicts Cyprus economy will grow by 2.5% this year

Cyprus’ economy will grow by 2.5 per cent this year as both inflation and unemployment recede, according to the latest forecast from the International Monetary Fund.

In its April ‘World Economic Outlook’ report, published on Tuesday, the IMF maintained its earlier forecast for 2.5 per cent GDP growth for the island.

On 2022, the IMF stated that the Cypriot economy grew by 5.6 per cent – revising its prior assessment of last October for a 3.5 per cent rise.

For 2024, economic growth is expected to speed up to 2.8 per cent.

On unemployment, the IMF projects a rate of 6.5 per cent for this year, and 6.2 per cent for 2024.

Inflation in 2023 will come down to 3.9 per cent from the 8.1 per cent recorded last year, further falling to 2.5 per cent in 2024.

Last year, Cyprus posted a balance of payments deficit of -8.8 per cent of GDP. This is forecast to improve – dropping to 7.8 per cent in 2023, and to 7.2 per cent in 2024.

For the eurozone and the EU, the IMF expects GDP growth of 0.8 per cent this year.

The IMF headlined its global report as ‘A Rocky Recovery’.

In an accompanying summary, the IMF said global economic activity “is experiencing a broad-based and sharper-than-expected slowdown, with inflation higher than seen in several decades.

“The cost-of-living crisis, tightening financial conditions in most regions, Russia’s invasion of Ukraine, and the lingering Covid-19 pandemic all weigh heavily on the outlook. Global growth is forecast to slow from 6.0 per cent in 2021 to 3.2 per cent in 2022 and 2.7 per cent in 2023. This is the weakest growth profile since 2001 except for the global financial crisis and the acute phase of the Covid-19 pandemic.”

For the United Kingdom, the IMF projects a 0.3 per cent GDP contraction this year, bouncing back to 1 per cent growth in 2024.

Russia, under a host of sanctions, will see its economy grow by 0.7 per cent in 2023, following a 2.1 per cent contraction last year.