National accounts show broad slowdown in Cyprus

Full national accounts data show that the slowdown in Cyprus was fairly broadbased in the third quarter of 2008 and that public spending prevented the economy from slowing further.
On Wednesday the Statistical Service confirmed that real GDP growth had slowed in the third quarter to 3.5% from 3.9% in the second.
The sharpest slowdown was witnessed in the sector comprising wholesale and retail trade, hotels and restaurants, where growth slowed from 3.7% in the second quarter to 2.5% in the third.
This sector is affected by tourism, which has been performing poorly.
There was also a significant slowdown in the construction sector, where growth slowed from 4.5% in the second quarter to 3.8% in the third.
However, the financial services sector also took a hit, slowing from growth of 4.6% to 4.0%.
Industry, comprising manufacturing, mining, quarrying, electricity, gas and water supply, slowed only marginally, from 3.1% to 2.9%.
The data also show that public spending was a key factor in helping to keep the economic growth rate fairly high.
Public-sector activities, including health and education, actually accelerated, from growth of 4.6% in the second quarter to 4.9% in the third quarter.

Fiona Mullen
Sapienta Economics Ltd
www.sapientaeconomics.com