The International Monetary Fund (IMF) on Tuesday lowered its growth projections for Cyprus for the year 2023, citing various economic factors for this decision.

According to the fund’s World Economic Outlook report for October 2023, the IMF now expects a real GDP growth rate of 2.2 per cent for Cyprus in 2023, down from the 2.5 per cent previously forecasted in April 2023.

Additionally, the IMF expects the growth rate to reach 2.7 per cent in 2024, slightly below the 2.8 per cent estimate provided in the previous World Economic Outlook.

The report also reveals numerous other economic indicators for Cyprus. In the fourth quarter of 2023, the IMF expects a growth rate of 1.8 per cent, while inflation is projected to decrease to 3.5 per cent for the current year, compared to the 3.9 per cent estimate in April, and drop further to 2.4 per cent in 2024, down from the previous estimate of 2.5 per cent.

Unemployment rates are expected to rise slightly to 6.7 per cent in 2023, up from the 6.5 per cent estimated in April, with a further decrease to 6.4 per cent expected in 2024, compared to 6.2 per cent in April.

The current account deficit is predicted to reach 8.6 per cent in 2023, compared to the earlier estimate of -7.8 per cent in April. It is projected to reduce to 7.9 per cent in 2024, down from -7.2 per cent.

In comparison to Cyprus, the IMF provides growth forecasts for the Eurozone, indicating a modest growth rate of 0.7 per cent for 2023 and 1.2 per cent for 2024.

Inflation within the Eurozone is expected to decline to 5.6 per cent and 3.3 per cent for 2023 and 2024, respectively, while unemployment rates are predicted to be 6.6 per cent in 2023 and 6.5 per cent in 2024.

Turning to neighbouring Greece, the IMF foresees a growth rate of 2.5 per cent for 2023 (down from 2.6 per cent) and 2 per cent for 2024 (up from 1.5 per cent). Unemployment is projected to rise to 10.8 per cent for the current year and decline to 9.3 per cent in 2024.

Meanwhile, Germany faces a contraction of 0.5 per cent in 2023, followed by a modest growth of 0.9 per cent in 2024.

What is more, France is expected to grow by 1 per cent in the current year and 1.3 per cent in the next, while Italy’s growth projections stand at 0.7 per cent for both 2023 and 2024.

Additionally, according to the IMF, Croatia is set to achieve the highest growth rate in 2023 at 2.7 per cent, followed by Spain and Greece, each expected to grow at 2.5 per cent. Finally, Spain’s GDP in 2024 is forecasted to increase by 1.7 per cent.