Economy slowing, but better than 2019

Cyprus’ economy slowed in 2022; however, the island’s Gross Domestic Product continued to grow past €24 bln, surpassing pre-coronavirus 2019 levels.

According to the data released by the Statistical Service, the economy grew by 5.6% GDP in 2022 from 6.6% growth in 2021.

In 2019, before the coronavirus crippled the economy in 2020, it grew by 5.5%.

GDP reached €24.23 bln last year, recording an increase of €1.292 bln compared to 2021.

According to Cystat, most sectors of the economy recorded an increase.

The wholesale and retail trade sector, including hotels and restaurants, showed an annual growth of 13.8%, buoyed by tourism income.

Its contribution to the economy was €4.59 bl, up from €4.038 bln, recording a growth of €556 mln in one year.

Financial and insurance activities increased by €86 mln, and the contribution of the public administration was €4.2 bln, showing an annual increase of €60 mln.

The professional, scientific, and technical activities sector contributed €2.39 bln from €2.31 bln.

And the construction sector contributed €1.45 bln, a decrease of €32 mln.

The economy is expected to lose more momentum in 2023, according to official forecasts.

According to the Central Bank of Cyprus in December, the development path of the Cypriot economy in 2023 is expected to slow to 2.5% GDP due to the deterioration in the external environment reflecting the prolonged energy crisis in Europe.

This year will see a correction of inflationary pressures affecting households and businesses.

At the same time, investments and structural reform projects under the Recovery and Resilience Plan are expected to contribute positively, said the CBC.

Echoing the CBC’s report, the University of Cyprus’ Economic Research predicts slower GDP growth at 2.6%.

The EU Commission is more reserved about the prospects of the island’s economy, as its latest forecast foresees 1.6% GDP growth.