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DBRS: Cyprus economy to grow at 4.3% GDP

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International credit rating agency DBRS Morning Star projects the Cypriot economy’s growth rate will be at 4.3% GDP this year and recede slightly to 4.1% in 2022.

The projections are included in a commentary on the baseline macroeconomic scenarios for rated sovereigns published on Wednesday.

The credit rating agency’s basis scenario for Cyprus is around the same level as the Ministry of Finance’s revised estimate of GDP growth of over 4% GDP.

Finance Minister Constantinos Petrides believes Cyprus’ GDP growth rate for the year could exceed 5.5%.

DBRS projects unemployment will be 7.8% this year and will drop to 7% in 2022.

In general, DBRS considers that “although COVID-19 remains a risk to the outlook, uncertainty around the macroeconomic effects of the pandemic has gradually receded.”

“Current median forecasts appear to incorporate some risks associated with further outbreaks but remain fairly positive on recovery prospects given expectations of continued fiscal and monetary policy support.

“The policy response to COVID-19 may nonetheless bring other risks to the forefront in coming months and years.”

The EU Commission forecasts that the Cyprus economy will also recover by 4.3% GDP growth in 2021.

GDP in Cyprus rose by a mere 0.2% during Q2 2021 compared to the previous quarter.

Still, it rose by 12.9% compared to the same time last year.