Cyprus Business Now

The performance of the Cypriot economy remains strong, despite a weakening of growth momentum in the last quarter of 2022, according to a report released this week by the Economics Research Centre (CypERC) of the University of Cyprus.

According to the centre’s Economic Outlook report for May 2023, favourable conditions have been created for economic activity in the short term.

The report notes that even though the growth rate is projected to slow further, it is expected to remain resilient.

Real GDP growth is forecast at 3 per cent for 2023 and 3.1 per cent for 2024, indicating a revision upwards by 0.4 and 0.3 percentage points, respectively, compared to the January issue’s forecasts.

The more positive outlook has been primarily attributed to the higher-than-expected growth rate in the fourth quarter of 2022, the recent slowdown in inflation, and the strengthening of economic confidence in Cyprus and the EU.

In addition, the report also suggested that the favourable performance of stock markets has contributed to a more positive outlook.

However, the report also acknowledged that risks to a worse-than-forecast outlook still exist, and are mainly linked to rising interest rates due to monetary tightening.

Inflation, which is based on the Consumer Price Index, is projected to decline in 2023 and 2024, with inflation forecast at 3 per cent in 2023 and 2.4 per cent in 2024.

Although the 2023 inflation forecast has been marginally revised downward compared to the January edition, the 2024 inflation forecast is higher by 0.4 percentage points due to strong domestic activity and upward price pressures recorded in 2022.

Finally, the report warns that despite the positive outlook, risks to a worse-than-forecast outlook persist.

The completion of the ‘THAL-CHOR 2’ project, a Cross-Border Cooperation for the Implementation of Maritime Spatial Planning, marks a significant milestone for Cyprus, according to an announcement by the Deputy Ministry of Shipping.

The ministry has hailed the project as a strategic undertaking of institutional value that will have far-reaching benefits for the economy, the environment, and citizens.

The project, which started in September 2018 and concluded in February 2023, had a total budget of €2,757,000.

The most important outcomes of the project were the preparation of the Marine Spatial Planning Policy Statement and the draft of the Marine Spatial Plan.

The ministry explained that these initiatives will aid in the holistic management of Cyprus’ marine waters and ensure their sustainable use.

The successful implementation of the project was the result of cooperation between Greece and Cyprus, based on a common cross-border framework of integrated maritime governance.

The project is in line with the European Union’s strategy for ‘Sustainable Blue Development’, which aims to strengthen the dynamics of the blue economy in critical sectors such as shipping, fishing, energy, and maritime and coastal tourism.

The EU has been actively promoting policies related to the protection and management of the marine environment and coastal zones, of which the ‘THAL-CHOR 2’ project is a part.

The Cyprus Stock Exchange (CSE) ended Thursday, May 4 with losses.

The general Cyprus Stock Market Index was at 107.27 points at 13:25 during the day, reflecting a decrease of 0.07 per cent over the previous day of trading.

The FTSE / CySE 20 Index was at 64.90 points, representing a drop of 0.06 per cent.

The total value of transactions came up to €83,584.

In terms of the sub-indexes, the main and hotel indexes rose by 0.15 per cent and 2.69 per cent respectively.

The alternative index fell by 0.59 per cent while the investment firm index remained unchanged.

The biggest investment interest was attracted by the Bank of Cyprus (-1.65 per cent), Hellenic Bank (-2.57 per cent), Atlantic Insurance (-1.1 per cent), Salamis Tours (-4.55 per cent), and the Cyprus Cement Company (-3.17 per cent).