ECONOMY: Cyprus among best performers in eurozone

Cyprus was among the top five outperforming economies in the eurozone in the first half of 2018, according to a macro update published by DBRS on Tuesday.

But Cyprus was the only top performing eurozone economy where consumer credit contracted, and mortgage lending was in negative territory. In fact, it was the second worst on both indicators.

DBRS ranked Cyprus fourth for Y-o-Y growth at 3.9% in H1 2018, behind Malta, Latvia and Slovenia. The underperformers included Italy, Belgium and France.

“At 2.3% Y-o-Y in the first half of 2018, EA growth was below the 2.8% recorded in the second half of 2017, but only slightly lower than the 2.5% growth rate for the whole of 2017. Growth was driven by household consumption and gross fixed investment,” said DBRS.

It said the rise in protectionism and a failure to agree the final deal on Brexit pose major risks to the outlook of the European economy.

The European Commission’s economic sentiment indicator for the Euro area dropped to 111.6 points in August from 112.1 in July 2018.

“This is the eighth consecutive month of deterioration. The EC Survey notes that the deterioration is due to less optimism among consumers and a milder decrease in the services sector,” said Canada’s DBRS. 

It said across the Euro area, consumer credit increased by 7.3% YoY in July, while mortgage lending grew by 3.4% YoY, slightly higher from the previous month.

Consumer credit was strongest in Belgium, Spain and Slovakia, while it is still contracting in Greece (-13.2%), Cyprus (-9.3%) and the Netherlands (-4.9%).

“Likewise, mortgage lending growth was strongest in Slovakia, Belgium, and Lithuania, but it remains negative in Latvia (-6.7%), Cyprus (-4.8) and Greece (-3.8).”