Cyprus growth reaches 3.8% in 2005

As forecast by the Financial Mirror

According to the most recent data released by the Statistical Service CYSTAT, real GDP growth reached 3.8% in 2005–exactly in line with Financial Mirror forecasts made throughout the year.

The growth rate was slightly lower than the 3.9% recorded in 2004.

According to data for the fourth quarter of 2005, real GDP grew by 3.6% year on year in the fourth quarter, slower than the (upwardly revised) 4.0% recorded in the third quarter.

On a seasonally adusted, quarter on quarter basis, real GDP growth slowed to 0.7% in the fourth quarter, from 1.0% in the third.

When forecasting real GDP growth for the whole of 2005, the Financial Mirror said that growth could slow in Q4 as higher oil prices took their toll on household budgets. The fourth quarter also appears to have been affected by tourism, as arrivals fell year on year in November and December.

The Statistical Service noted that indicative growth rates for 2005 were building permits, up by 13.3%; financial intermediation services up 9.3%; tourists arrivals up 5.2%; tourist revenue up 2.4%; total imports up 8.9%, total exports up 22.6%; volume of manufacturing down 1.3%, electricity output up 3.9%; wholesale turnover value up 4.7%; vehicle sales by value up 0.3%; retail sales volume up 4.6% etc.

According to Financial Mirror calculations, if the economy grows during 2006 at the same pace as it did in the second half of 2005, then real GDP growth will reach around 3.5% in 2006.

A full analysis of the GDP data will be in our next hard-copy issue of the Financial Mirror.

Fiona Mullen