ECONOMY: IMF revises upward its GDP growth projections for Cyprus

The International Monetary Fund (IMF) has significantly upgraded its growth projections for the Cypriot economy for 2018 and 2019 in its World Economic Outlook, predicting GDP rates of 4% and 4.2% respectively.

For 2019, the IMF`s review is greater by 1.2 percentage points while for 2018 it is higher by 0.4 percentage points, compared to the projections published in April.

The international body had expected the Cypriot economy would grow at a rate of 3.6% (4%) in 2018 and 3.0% (4.2%) in 2019. In 2017 the Cypriot economy grew by 3.9%.

The IMF also estimates that unemployment will gradually drop from 11.1% in 2017, to 9.5% in 2018 and 8% next year, compared to 10% and 9.1% respectively that it had projected in April.

It believes that inflation will reach 0.8% in 2018 and 1.8% in 2019 compared to 0.7% last year. In its spring projections the IMF expected 0.4% inflation for this year and 1.6% in 2019.

The IMF expects a significant drop of the current account deficit in 2018 to 3.1% of GDP compared to 6.7% in 2017. However, it projects that it will increase by 5.2% of GDP in 2019.