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EC: Cyprus' GDP Expected to Reach 3.3% in 2019
February 8, 2019
Cyprus’ GDP growth is expected to reach 3.8% in 2018 following 4.2% in 2017, according to the winter interim economic forecast, issued today by the European Commission. According to the forecast GDP growth is expected at 3.3% in 2019 and 2.7% in 2020. Meanwhile inflation is expected at 0.8% for 2018, 0.7% for 2019 and 1.2% for 2020. In 2019 and 2020, growth is projected to slow down to 3.3% and 2.7%, due to the less favourable external environment. "Slowing growth in the euro area and persistent uncertainties in major trading partners weigh on Cyprus’ outlook and increase downside risks", warns the European Commission.
According to the Commission, "Cyprus’ economy grew strongly in the first three quarters of 2018, although real GDP growth in the third quarter (3.7% y-o-y) was the lowest of the year" and "economic sentiment rebounded in the fourth quarter after a soft patch in the second and third".
"The labour market continues to perform strongly", the forecast reads, as employment increased by 3.7% (y-o-y) in 2018-Q3 and compensation per employee by 1.9% (compared to 0.7% in 2017). Survey data signalled that the construction sector continued hiring in the fourth quarter.