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The economy of Cyprus is exhibiting a slight growth rate of the economy for 2017 and 2018, according to the International Monetary Fund World Economic Outlook for April, aligning its projections for the next two years with corresponding evaluations of the European Commission.
The WEO report said that after a GDP of 2.8% in 2016, growth will be slightly slower to 2.5% and in 2019 to 2.3%. Similar estimates were presented by the Commission in February.
The corresponding report in October 2016 estimated that the economy’s growth would reach 2.8% and to 2.2% in 2017.
Inflation, however, is entering a positive course, reaching 1.5% in 2017 and 1.4% in 2018.
Unemployment will drop from 12.9% in 2016 to 11.3% this year and even reaching 10.2% in 2019.
Meanwhile, the IMF said it expects Cyprus’ public debt to grow to 109.3% of GDP in 2017 compared to 108% in 2016, according to its Fiscal Monitor for April issued on Wednesday.
According to IMF projections, the General Government gross debt is not expected to fall below 100% before 2020, adopting a more conservative approach in relation to October 2016 when IMF projected that Cyprus’ debt would have fallen to 97.9% in 2019.
The IMF considers that the ratio of government debt to GDP in Cyprus was at 108% in 2016, and will increase to 109.3% in 2017. Thereafter will decrease to 107.4% in 2018, to 100.5% in 2019, to 95% in 2020, to 91.6% in 2021 and to 86.7% in 2022.
The primary balance of the general government that according to IMF was 2.3% of GDP in 2016 (compared with 2% envisaged last October) is expected to fall slightly to 2.2% in 2017 and 2018. The primary balance is projected to grow to 2.5% in 2019 and to 2.6% in 2020-2022.
General Government overall balance, which recorded a deficit 0.3% of GDP in 2016 according to IMF, is expected to remain at the same level in 2017. The deficit is expected to increase to 0.5% in 2018 and reduce to 0.1% in April 2019. From 2020 until 2022, IMF projects a surplus of 0.1%.
Revenues of the General Government, amounting to 38.7% of GDP in 2016 is expected to gradually reduced to 37.9% in 2017 and to 37.6 % by 2022.
Expenditure of General Government amounting to 39% of GDP in 2016, is expected to reduce to 38.2% in 2017-2018, to 38.1% in 2019, to 37.7% and to 37.5% by 2022.
