Signs of weaker construction activity
One in four employed are non-Cypriots
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The reported real GDP growth rate for Cyprus in the third quarter of 2007 was revised up to 4.6% over the year-earlier period on Tuesday, compared with a flash estimate a few weeks ago of 4.3%.
Real GDP growth in the first nine months of 2007 is estimated at 4.4%, compared with a growth rate for the whole of 2006 of 3.8%.
Measured on the expenditure basis, one of the main drivers of growth in the third quarter was household consumption. This accounts for two-thirds of all GDP and rose in real terms by 5.1% over the year earlier in the third quarter, compared with 5.0% in the second.
However, there has also been a fair amount of investment by businesses, with investment in non-transport machinery and equipment up by 5.1% in the third quarter. This was slower than the 6.5% recorded in the second, but considerably higher than the 1.8% in the first quarter.
Growth in housing construction has been fairly modest in 2007 compared with 2006 according to the figures. Housing construction was up in real terms by only 1.2% in the third quarter and 0.6% in the second, compared with 3.9% in 2006.
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Government kept purse strings tight (back then)
The figures also show that for the first three quarters of the year, when the government was awaiting approval for adoption of the euro in January, the government kept a tight hold on the purse strings, with government consumption actually falling year on year by 8.6% in the second quarter and rising by only 1.7% in the third.
However, after the government’s announcement of a third, desperate pre-election supplementary budget last week, one can expect to see that figure rise significantly in the fourth quarter.
With tourism still in the doldrums, exports of goods and services continued to perform poorly, rising by less than 1% in real terms, while imports continued to boom, fuelled no doubt by consumer and business spending.
Finance and business races ahead
On a sectoral side of the accounts, the large category of “financial intermediation, real estate, rental and business activitiesâ€, which accounts for one-quarter of GDP, rose by 7.7% in the third quarter, after 8.1% in the second.
As well as the business investment mentioned above, this is no doubt as a result of the rapid increase in lending, which has been rising by more than 20% per year for months.
The sectoral side of the national accounts also suggest a slight slowdown in construction activity, which rose by 3.4% in the third quarter from 3.1% in the second.
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More foreign labour than expected
The Statistical Service said the main reason for the revision of quarterly national accounts is employment data coming from the Ministry of Labour and Social Insurance on the employment of foreigners in
The number of gainfully employed persons in
Data from the Social Insurance department show that the number of registered foreign workers was 51,045 in July not including 36,296 EU workers, making a total of 87,341, equivalent to 11.2% of the population or 23% of the labour force.
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Fiona Mullen
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