Cyprus

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Economics

Economy - overview

The area of the Republic of Cyprus under government control has a market economy dominated by the service sector, which accounts for nearly four-fifths of GDP. Tourism, financial services, and real estate are the most important sectors. Erratic growth rates over the past decade reflect the economy's reliance on tourism, the profitability of which often fluctuates with political instability in the region and economic conditions in Western Europe. Nevertheless, the economy in the area under government control has grown at a rate well above the EU average since 2000. Cyprus joined the European Exchange Rate Mechanism (ERM2) in May 2005 and adopted the euro as its national currency on 1 January 2008. An aggressive austerity program in the preceding years, aimed at paving the way for the euro, helped turn a soaring fiscal deficit (6.3% in 2003) into a surplus of 1.2% in 2008, and reduced inflation to 4.7%. This prosperity came under pressure in 2009, as construction and tourism slowed in the face of reduced foreign demand triggered by the ongoing global financial crisis. Although Cyprus lagged behind its EU peers in showing signs of stress from the global crisis, the economy tipped into recession in 2009, contracting by 1.8%, and has been slow to bounce back since, posting an anemic growth rate of 0.6% in 2010. In addition, the budget deficit is on the rise and reached 5.3% of GDP in 2010, a violation of the EU's budget deficit criteria of no more than 3% of GDP. In response to the country's deteriorating finances, Nicosia is promising to implement measures to cut the cost of the state payroll, curb tax evasion, and revamp social benefits. However, it has been slow to act, lacking a consensus in parliament and among the social partners for its proposed measures.

GDP (purchasing power parity):

$23.19 billion (2010 est.)

country comparison to the world: 118

$22.95 billion (2009 est.)

$23.34 billion (2008 est.)

note: data are in 2010 US dollars

 

GDP (official exchange rate):

$23.17 billion (2010 est.)

 

GDP - real growth rate:

1% (2010 est.)

country comparison to the world: 174

-1.7% (2009 est.)

3.6% (2008 est.)

 

GDP - per capita (PPP):

$21,000 (2010 est.)

country comparison to the world: 62

$21,200 (2009 est.)

$21,900 (2008 est.)

note: data are in 2010 US dollars

 

GDP - composition by sector:

agriculture: 2.3%

industry: 16.4%

services: 81.3% (2010 est.)

 

Labor force:

407,700 (2010 est.)

country comparison to the world: 157

 

Labor force - by occupation:

agriculture: 8.5%

industry: 20.5%

services: 71% (2006 est.)

 

Unemployment rate:

4.6% (2010 est.)

country comparison to the world: 42

4.3% (2009 est.)

 

Population below poverty line:

NA%

 

Household income or consumption

by percentage share:

lowest 10%: NA%

highest 10%: NA%

 

Distribution of family income - Gini index:

29 (2005)

country comparison to the world: 123

 

Investment (gross fixed):

18.4% of GDP (2010 est.)

country comparison to the world: 138

 

Budget:

revenues:: $9.576 billion

expenditures:: $10.81 billion (2010 est.)

 

Taxes and other revenues:

41.3% of GDP (2010 est.)

country comparison to the world: 37

 

Budget surplus (+) or deficit (-):

-5.3% of GDP (2010 est.)

country comparison to the world: 150

 

Public debt:

60.8% of GDP (2010 est.)

country comparison to the world: 33

58% of GDP (2009 est.)

 

Inflation rate (consumer prices):

2.4% (2010 est.)

country comparison to the world: 79

0.4% (2009 est.)

 

Central bank discount rate:

1.75% (31 December 2010)

country comparison to the world: 120

1.75% (31 December 2009)

note: this is the European Central Bank's rate on the marginal lending facility, which offers overnight credit to banks in the euro area

 

Commercial bank prime lending rate:

6.815% (31 December 2010 est.)

country comparison to the world: 133

7.493% (31 December 2009 est.)

 

Stock of narrow money:

$4.559 billion (31 December 2010 est.)

country comparison to the world: 92

$4.734 billion (31 December 2009 est.)

note: see entry for the European Union for money supply in the euro area; the European Central Bank (ECB) controls monetary policy for the 17 members of the EMU; individual members of the EMU do not control the quantity of money circulating within their own borders

 

Stock of broad money:

$52.97 billion (31 December 2010 est.)

country comparison to the world: 66

$55 billion (31 December 2009 est.)

 

Stock of domestic credit:

$101.2 billion (31 December 2009 est.)

country comparison to the world: 50

$80.68 billion (31 December 2008 est.)

 

Market value of publicly traded shares:

$6.834 billion (31 December 2010)

country comparison to the world: 80

$4.993 billion (31 December 2009)

$7.955 billion (31 December 2008)

 

Agriculture - products:

citrus, vegetables, barley, grapes, olives, vegetables; poultry, pork, lamb; dairy, cheese

 

Industries:

tourism, food and beverage processing, cement and gypsum production, ship repair and refurbishment, textiles, light chemicals, metal products, wood, paper, stone, and clay products

 

Industrial production growth rate:

-0.3% (2010 est.)

country comparison to the world: 149

 

Electricity - production:

4.709 billion kWh (2008 est.)

country comparison to the world: 116

 

Electricity - consumption:

4.556 billion kWh (2008 est.)

country comparison to the world: 116

 

Electricity - exports:

0 kWh (2009 est.)

 

Electricity - imports:

0 kWh (2010 est.)

 

Oil - production:

0 bbl/day (2010 est.)

country comparison to the world: 165

 

Oil - consumption:

61,000 bbl/day (2010 est.)

country comparison to the world: 94

 

Oil - exports:

0 bbl/day (2009 est.)

country comparison to the world: 165

 

Oil - imports:

57,290 bbl/day (2009 est.)

country comparison to the world: 84

 

Oil - proved reserves:

0 bbl (1 January 2011 est.)

country comparison to the world: 122

 

Natural gas - production:

0 cu m (2009 est.)

country comparison to the world: 173

 

Natural gas - consumption:

0 cu m (2009 est.)

country comparison to the world: 169

 

Natural gas - exports:

0 cu m (2009 est.)

country comparison to the world: 85

 

Natural gas - imports:

0 cu m (2010 est.)

country comparison to the world: 110

 

Natural gas - proved reserves:

0 cu m (1 January 2011 est.)

country comparison to the world: 169

 

Current account balance:

-$1.321 billion (2010 est.)

country comparison to the world: 148

-$1.745 billion (2009 est.)

 

Exports:

$2.089 billion (2010 est.)

country comparison to the world: 131

$2.137 billion (2009 est.)

 

Exports - commodities:

citrus, potatoes, pharmaceuticals, cement, clothing

 

Exports - partners:

Greece 24.5%, Germany 10.5%, UK 8.6% (2010)

 

Imports:

$8.465 billion (2010 est.)

country comparison to the world: 96

$8.159 billion (2009 est.)

 

Imports - commodities:

consumer goods, petroleum and lubricants, machinery, transport equipment

 

Imports - partners:

Greece 19%, Italy 9.5%, Germany 9%, UK 8.4%, Israel 8%, China 5.3%, France 5.2%, Netherlands 4.6% (2010)

 

Reserves of foreign exchange and gold:

$1.144 billion (31 December 2010 est.)

country comparison to the world: 131

$1.289 billion (31 December 2009 est.)

 

Debt - external:

$NA (31 December 2010 est.)

$32.61 billion (31 December 2008 est.)

 

Stock of direct foreign investment - at home:

$31.41 billion (31 December 2010 est.)

country comparison to the world: 60

$26.56 billion (31 December 2009 est.)

 

Stock of direct foreign investment - abroad:

$19.95 billion (31 December 2010 est.)

country comparison to the world: 42

$15.76 billion (31 December 2009 est.)

 

Exchange rates:

euros (EUR) per US dollar -

0.755 (2010)

0.7198 (2009)

0.6827 (2008)

note:: on 1 January 2008 Cyprus adopted the euro as legal tender

 


Economy of the area administered by Turkish Cypriots

Economy - overview

The Turkish Cypriot economy has roughly half the per capita GDP of the south, and economic growth tends to be volatile, given the north's relative isolation, bloated public sector, reliance on the Turkish lira, and small market size. The Turkish Cypriots are heavily dependent on transfers from the Turkish Government. Ankara directly finances about one-third of the Turkish Cypriot "administration's" budget. Aid from Turkey has exceeded $400 million annually in recent years. The Turkish Cypriot economy experienced a sharp slowdown in 2008-09 due to the global financial crisis and to its reliance on British and Turkish tourism, both of which declined due to the recession. The Turkish Cypriot budget deficit also deteriorated in 2009 due to decreased state revenues and increased government expenditures on public sector salaries and social services. The Turkish Cypriot economy declined about 0.6% in 2010.
GDP (purchasing power parity): $1.829 billion (2007 est.)
GDP - real growth rate: -0.6% (2010 est.)
GDP - per capita: $11,700 (2007 est.)
GDP - composition by sector: agriculture: 8.6%, industry: 22.5%, services: 69.1% (2006 est.)
Labor force: 95,030 (2007 est.)
Labor force - by occupation: agriculture: 14.5%, industry: 29%, services: 56.5% (2004)
Unemployment rate: 9.4% (2005 est.)
Population below poverty line: %NA
Inflation rate: 11.4% (2006)
Budget: revenues: $2.5 billion, expenditures: $2.5 billion (2006)
Agriculture - products: citrus fruit, dairy, potatoes, grapes, olives, poultry, lamb
Industries: foodstuffs, textiles, clothing, ship repair, clay, gypsum, copper, furniture
Industrial production growth rate: -0.3% (2007 est.)
Electricity production: 998.9 million kWh (2005)
Electricity consumption: 797.9 million kWh (2005)
Exports: $68.1 million, f.o.b. (2007 est.)
Export - commodities: citrus, dairy, potatoes, textiles
Export - partners: Turkey 40%; direct trade between the area administered by Turkish Cypriots and the area under government control remains limited
Imports: $1.2 billion, f.o.b. (2007 est.)
Import - commodities: vehicles, fuel, cigarettes, food, minerals, chemicals, machinery
Import - partners: Turkey 60%; direct trade between the area administered by Turkish Cypriots and the area under government control remains limited
Reserves of foreign exchange and gold: $NA
Debt - external: $NA
Currency (code): Turkish new lira (YTL)
Exchange rates: Turkish new lira per US dollar: 1.5181 (2010) 1.319 (2007) 1.4286 (2006) 1.3436 (2005)