Cyprus records another current-account surplus

Cyprus recorded another current-account surplus on it balance of payments in the third quarter of 2005, at CYP 60.9 mln (around EUR 104 mln), compared with a surplus of CYP 22 mln in the second quarter.

This is despite the fact that revenues from tourism rose by little over 2% in 2005.

Income from travel, at CYP 326 mln, was not enough by itself to cover the trade deficit on goods of CYP 509 mln.

However, Cyprus got a boost from the increasingly dynamic “other business services” sector, dominated by accounting and law, which contributed a net CYP 144 mln to the current account in Q3.

The overall services surplus including other items such as transport (surplus of CYP 64 mln) came in at CYP 586 mln.

Financial account in the red

The capital and financial account was slightly in the red, with a deficit of CYP 32 mln in the third quarter, though it was not large enough to lead to a drawdown in foreign exchange reserves.

FDI inflows were a healthy CYP 110 mln, but foreign purchases of shares on the reviving Cyprus stock exchange meant that the difference between assets and liabilities in the portfolio investment account was slightly negative, at CYP 55 mln, and this accounted for the overall negative figure on the financial and capital account.

Fiona Mullen