Robust growth in tourist arrivals and revenues this year will offset losses the economy may suffer from sanctions on Cyprus’ services sector, according to initial Finance Ministry estimates.
As reported by the news site Stockwatch, Finance Ministry technocrats expect to see tourism buffer any collateral damage the services sector may suffer from sanctions imposed on Russian oligarchs and Cypriot fixers over Moscow’s invasion of Ukraine.
The ministry estimated that Cyprus’ prospects of attracting more foreign investments had diminished.
As things stand, technocrats are upbeat over the economy’s outlook as to-date numbers of tourist arrivals and income have exceeded those recorded in 2019, a year record for the tourism industry.
During the first four months of 2023, 735,000 arrivals were recorded, approximately 200,000 more than in 2022 and around 50,000 more compared to 2019.
According to Cystat data, income from tourism reached €102.2 mln in January and February, easily surpassing the €67.8 mln revenue from tourists in the first two months of last year.
Based on the Passenger Survey results, tourism revenues recorded an increase of 50.7% compared to the same period in 2022.
Compared with January-February 2019, revenue from tourism marked an increase of 11%.
In 2019, some 3.97 million tourists headed to the island for a holiday.
The outlook for 2020 and 2021 turned negative due to the pandemic, and the 2022 tourism season was affected by the Russia-Ukraine war.
Tourist arrivals from Russia in 2019 reached nearly 900,000, with the Russian market being the second largest after the UK.
In the difficult years of the pandemic and the energy crisis, the Deputy Ministry of Tourism sought and succeeded in finding new markets that covered the loss of arrivals from Russia and Ukraine.
Ministry of Finance technocrats estimate that if the reduction of inflationary pressures continues, combined with deflated energy prices, 2023 could be a record year for Cyprus tourism.
Based on these estimates, officials predict the economic growth rate should reach 3%- 3.5% GDP in 2023.
It is estimated that fiscal surpluses of 2% will be reached, helping to reduce public debt and keeping Cyprus on track to bring its debt rate down to 70% of GDP by 2025 from 86%.