Reports on current economic developments in the Cypriot economy.
Hellenic Bank’s Economic Review: Fourth Quarter 2018
Positive growth dynamics continue
Hellenic Bank assesses that Cyprus' macroeconomic outlook is positive and is accompanied by a significant increase in real gross domestic product during the first nine months of 2018, robust employment growth and further improvement in key domestic indicators. Growth is expected to be supported by private consumption and investment and by an improving and robust labour market. Public expenditure is also expected to contribute positively to growth through higher investment expenditures. According to the baseline macroeconomic scenario of Hellenic Bank’s Economic Research Department, growth is expected to be 4,0% in 2018 and 3,9% in 2019.
In its Economic Review, the Department of Economic Research, notes that the recovery phase has passed and the economy is now entering its growth phase. In absolute terms, the value of all final goods and services produced domestically at constant prices, i.e, real GDP, stood at €19,5 billion at end 2017, recovering to the pre-crisis level. Correspondingly, nominal GDP, the value of all final goods and services produced domestically at current prices, reached €19,6 billion in 2017, up from €18,5 billion in the previous year. The Economics Research Department notes that what is encouraging for the new growth phase, helping to avoid the repeat of the boom-bust cycle experienced in the past, is that the recent economic performance has not been driven by government through public spending and the related multiplicative role, nor is it funded from unsustainable credit-fuelled consumption as observed in the pre-crisis period.
Fourth Quarter 2018
Quarterly Market Review
The broad-based economic recovery gathered pace in 2017, with real GDP increasing by an annual 4,2%. The increased activity was broad-based. Developments are currently driven by increases in private consumption and investment, mainly large construction buildings.