EIU expects 3.7% growth for Cyprus

The GDP growth rate of Cyprus in 2008 is expected at 3.7% for 2008, and 3.1% in 2009 according to the July 2008 Country Report on Cyprus issued by the Economic
Intelligence Unit (EIU).
The lower GDP forecasts stem from the anticipated slowing pace of lending which,
according to EIU analysts, reflects the negative impact on mortgage borrowing from the
imposition of VAT on residential land (from mid-2008), the weaker UK economy, which is expected to dampen foreign demand for real estate and lower tourism arrivals.
EIU analysts also forecast a fiscal surplus of 1.5% of GDP in 2008 and a deficit of 0.5% of GDP in 2009. According to the EIU analysts, high food and energy prices will keep inflation high at 4.4% in 2008, whilst for 2009 the rate of inflation is forecasted at 2.7%.