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IMF revises Cyprus GDP down to 2.2%

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International Monetary Fund (IMF) World Economic Outlook forecasts that Cyprus’ growth rate for 2023 will slow to 2.2% GDP, down from the 2.5% it had projected in April.

For 2024, the IMF forecasts a lower growth rate of 2.7% instead of 2.8%.

In addition, IMF expects that growth for the fourth quarter of 2023 will be 1.8%, while inflation will fall to 3.5%, compared to 3.9% projected in April’s outlook.

For 2024, inflation is projected to drop to 2.4% instead of 2.5%.

The unemployment rate in Cyprus is forecasted to increase slightly to 6.7% this year, compared to 6.5% in the last projection, and dip to 6.4% in 2024, again revised upwards compared to 6.2% in April.

The current account deficit is expected to be 8.6% of GDP for 2023, up from 7.8% in April, and IMF forecasts that it will be 7.9% in 2024, compared to the previously projected 7.2%.

Regarding the eurozone, the IMF projects a growth rate of 0.7% for 2023 and 1.2% for 2024, while inflation is expected to drop to 5.6% and 3.3% in 2024.

It projects the eurozone’s unemployment rate at 6.6% in 2023 and 6.5% in 2024.

IMF forecasts global growth to slow from 3.5% in 2022 to 3% in 2023 and 2.9% in 2024, well below the historical (2000–19) average of 3.8%.

Advanced economies are expected to drag from 2.6% in 2022 to 1.5% GDP in 2023 and 1.4% in 2024.

On the other hand, emerging markets and developing economies are projected to have a modest decline in growth from 4.1% in 2022 to 4% in both 2023 and 2024.

Global inflation is forecast to decline steadily, from 8.7% in 2022 to 6.9% in 2023 and 5.8% in 2024.

Core inflation is generally projected to decline more gradually, and inflation is not expected to return to target until 2025 in most cases.