Turkish Cypriot economy is not the worst in its history

I am writing to address the recent article headlined “The worst economic crisis in Turkish Cypriot history” (Cyprus Mail, April 14).

While the article correctly notes that inflation stands at 94.5 per cent, it overlooks several significant indicators that provide a more comprehensive picture of the economic situation.

Firstly, the article fails to acknowledge the positive trend in unemployment rates as indicated by the annual Household Labour Force Survey (HLFS), which showed unemployment falling to 5.1 per cent in 2023, the lowest level since reliable records began in 2004.

In contrast unemployment was 6.3 per cent in 2019, 10.1 per cent in 2020, 7.8 per cent in 2021, and 6.8 per cent in 2022.

Furthermore, the article neglected to mention the economic growth experienced in 2022. Estimates show that Gross Domestic Product rose by 13.3 per cent in real terms, the fastest pace of growth since the post-Annan Plan referendum period.

This is compared to economic growth of just 3.9 per cent in 2021. In 2020, the economy shrank by 16.2 per cent due to the pandemic, causing the worst recession since records began in 1977.

Gross National Product per capita rose from $10,055 in 2020 and $11,129 in 2021, to $14,648 in 2022.

The value of exports is up, despite the barriers to international trade, by almost 27 per cent in 2023 compared to 2022, reaching nearly $160 million, the highest level for at least 10 years.

Exports via the “Green Line” increased from $6.12 million in 2021 to $14.77 million in 2022 and $16.75 million in 2023.

Tourism is also on the rise. Figures show a 31.1 per cent increase in the numbers of tourists, from around 1.4 million in 2022 to nearly 1.9 million in 2023.

These are hardly signs of an economy “in freefall since 2021”, as your article claimed.

It is also necessary to recognise the efforts made to mitigate the effects of high inflation on purchasing power.

These include a 52.4 per cent increase in the minimum wage in January, social security contribution support for small business owners, higher income tax thresholds, and a decision to increase public sector salaries and pensions once every four months instead of every six months, a move likely to be emulated for the lowest paid workers in the private sector.

In light of these facts, I urge a more balanced portrayal of the economic situation of Turkish Cypriots in future articles.

Eltan Halil, Nicosia