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Cyprus: Economy#

The area of the Republic of Cyprus under government control has a market economy dominated by the service sector, which accounts for four-fifths of GDP. Tourism, financial services, and real estate have traditionally been the most important sectors. Cyprus has been a member of the European Union (EU) since May 2004 and adopted the euro as its national currency in January 2008. During the first five years of EU membership, the Cyprus economy grew at an average rate of about 4%, with unemployment between 2004 and 2008 averaging about 3%. An overextended banking sector with excessive exposure to Greek debt resulted in a contraction in economic growth. Two of Cyprus' biggest banks were among the largest holders of Greek bonds in Europe and had a substantial presence in Greece through bank branches and subsidiaries. Following numerous downgrades of its credit rating, Cyprus lost access to international capital markets in May 2011. The economy contracted by an accumulated 8.2% between 2009 and 2013 and is not expected to return to positive growth before 2015. Unemployment is currently over 17% and expected to reach 19% in 2014. In July 2012, Cyprus became the fifth eurozone government to request an economic bailout program from the European Commission, European Central Bank and the International Monetary Fund - known collectively as the "Troika". Shortly after the election of President Nicos ANASTASIADES in February 2013, Cyprus faced an economic crisis and agreed with the Troika to a $13 billion bailout that included losses on uninsured bank deposits. The bailout triggered a two-week bank closure and the imposition of capital controls, some of which remained in place through 2014. Cyprus' two largest banks merged and the combined entity was recapitalized through conversion of some large bank deposits to shares and imposition of losses on some bank bondholders. The Troika conditioned the bailout on progress in financial and structural reforms and privatization of state-owned enterprises. Cyprus has downsized and restructured its banking sector significantly. Three positive reviews by the Troika since May 2013 indicate that Cyprus’ bailout program is on track with a fourth review scheduled in May 2014. In October 2013, Cyprus completed preliminary appraisal of hydrocarbon deposits in its territorial waters, which revealed less than anticipated natural gas reserves. Additional exploration drilling is likely to continue in 2014-2015.

Economic Facts#

GDP (purchasing power parity)$21.62 billion (2013 est.)
$23.68 billion (2012 est.)
$24.27 billion (2011 est.)
note: data are in 2013 US dollars
GDP - real growth rate-8.7% (2013 est.)
-2.4% (2012 est.)
0.5% (2011 est.)
GDP - per capita (PPP)$24,500 (2013 est.)
$27,200 (2012 est.)
$28,200 (2011 est.)
note: data are in 2013 US dollars
GDP - composition, by sector of originagriculture: 2.4%
industry: 15.9%
services: 81.7% (2013 est.)
Population below poverty lineNA%
Household income or consumption by percentage sharelowest 10%: NA%
highest 10%: NA%
Labor force - by occupationagriculture: 8.5%
industry: 20.5%
services: 71% (2006 est.)
Exports - commoditiescitrus, potatoes, pharmaceuticals, cement, clothing
Exports - partnersGreece 23%, UK 10.1% (2012)
Agriculture - productscitrus, vegetables, barley, grapes, olives, vegetables; poultry, pork, lamb; dairy, cheese
Budgetrevenues:: $8.799 billion
expenditures:: $10.04 billion (2013 est.)
Imports - commoditiesconsumer goods, petroleum and lubricants, machinery, transport equipment
Imports - partnersGreece 21.6%, Israel 11.9%, Italy 8.3%, UK 7.3%, Germany 7.1%, Netherlands 6.7%, France 6%, China 4.5% (2012)
Exchange rateseuros (EUR) per US dollar -
0.7634 (2013 est.)
0.7752 (2012 est.)
0.755 (2010 est.)
0.7198 (2009 est.)
0.6827 (2008 est.)
Exports$2.42 billion (2013 est.)
$2.602 billion (2012 est.)
Debt - external$95.28 billion (31 December 2013 est.)
$103.5 billion (31 December 2012 est.)
Fiscal yearcalendar year
Imports$4.747 billion (2013 est.)
$6.755 billion (2012 est.)
Industrial production growth rate-3.5% (2013 est.)
Industriestourism, food and beverage processing, cement and gypsum, ship repair and refurbishment, textiles, light chemicals, metal products, wood, paper, stone and clay products
Inflation rate (consumer prices)0.2% (2013 est.)
$NA (2012 est.)
Labor force443,500 (2013 est.)
Unemployment rate17.4% (2013 est.)
11.9% (2012 est.)
Distribution of family income - Gini index31 (2012 est.)
29 (2005 est.)
Public debt113.1% of GDP (2013 est.)
85.8% of GDP (2012 est.)
note: data cover general government debt, and includes debt instruments issued (or owned) by government entities other than the treasury; the data include treasury debt held by foreign entities; the data exclude debt issued by subnational entities, as well as intra-governmental debt; intra-governmental debt consists of treasury borrowings from surpluses in the social funds, such as for retirement, medical care, and unemployment
Current account balance-$358.2 million (2013 est.)
-$1.506 billion (2012 est.)
Reserves of foreign exchange and gold$853 million (31 December 2013 est.)
$1.191 billion (31 December 2012 est.)
GDP (official exchange rate)$21.78 billion (2013 est.)
Stock of direct foreign investment - at home$28.53 billion (31 December 2013 est.)
$26.28 billion (31 December 2012 est.)
Stock of direct foreign investment - abroad$12.11 billion (31 December 2013 est.)
$11.16 billion (31 December 2012 est.)
Market value of publicly traded shares$1.996 billion (31 December 2012 est.)
$2.853 billion (31 December 2011)
$NA (31 December 2010 est.)
Economy of the area administered by Turkish CypriotsEconomy - overview: The market-based economy of the area administered by Turkish Cypriots, known locally as the "Turkish Republic of Northern Cyprus" ("TRNC"), is roughly half the size of its southern neighbor and is likewise dominated by the service sector with a large portion of the population employed by the government. Since its creation, the "TRNC" has heavily relied on financial assistance from Turkey which supports the "TRNC" defense, telecommunications, water and postal services, and the "TRNC" remains vulnerable to the Turkish market and monetary policy through its use of the Turkish Lira. The "TRNC" weathered the European financial crisis relatively unscathed-compared to the Republic of Cyprus-because of the lack of financial sector development, health of the Turkish economy, and its separation from the rest of the island.
GDP (purchasing power parity): $1.829 billion (2007 est.)
GDP - real growth rate: -0.6% (2010 est.)
GDP - per capita: $11,700 (2007 est.)
GDP - composition by sector: agriculture: 8.6%, industry: 22.4%, services: 69.1% (2006 est.)
Labor force: 95,030 (2007 est.)
Labor force - by occupation: agriculture: 14.5%, industry: 29%, services: 56.5% (2004)
Unemployment rate: 9.4% (2005 est.)
Population below poverty line: %NA
Inflation rate: 11.4% (2006)
Budget: revenues: $2.5 billion, expenditures: $2.5 billion (2006)
Agriculture - products: citrus fruit, dairy, potatoes, grapes, olives, poultry, lamb
Industries: foodstuffs, textiles, clothing, ship repair, clay, gypsum, copper, furniture
Industrial production growth rate: -0.3% (2007 est.)
Electricity production: 998.9 million kWh (2005)
Electricity consumption: 797.9 million kWh (2005)
Exports: $68.1 million, f.o.b. (2007 est.)
Export - commodities: citrus, dairy, potatoes, textiles
Export - partners: Turkey 40%; direct trade between the area administered by Turkish Cypriots and the area under government control remains limited
Imports: $1.2 billion, f.o.b. (2007 est.)
Import - commodities: vehicles, fuel, cigarettes, food, minerals, chemicals, machinery
Import - partners: Turkey 60%; direct trade between the area administered by Turkish Cypriots and the area under government control remains limited
Reserves of foreign exchange and gold: $NA
Debt - external: $NA
Currency (code): Turkish new lira (YTL)
Exchange rates: Turkish new lira per US dollar: 1.668 (2011) 1.5026 (2010) 1.55 (2009) 1.3179 (2008) 1.319 (2007)
Central bank discount rate0.75% (31 December 2013)
1.5% (31 December 2010)
note: this is the European Central Bank's rate on the marginal lending facility, which offers overnight credit to banks in the euro area
Commercial bank prime lending rate7% (31 December 2013 est.)
7.05% (31 December 2012 est.)
Stock of domestic credit$50.39 billion (31 December 2013 est.)
$54.29 billion (31 December 2012 est.)
Stock of narrow money$14.73 billion (31 December 2011 est.)
$14.6 billion (31 December 2010 est.)
note: see entry for the European Union for money supply in the euro area; the European Central Bank (ECB) controls monetary policy for the 17 members of the EMU; individual members of the EMU do not control the quantity of money circulating within their own borders
Stock of broad money$46.46 billion (31 December 2013 est.)
$50.06 billion (31 December 2012 est.)
Taxes and other revenues40.4% of GDP (2013 est.)
Budget surplus (+) or deficit (-)-5.7% of GDP (2013 est.)
GDP - composition, by end usehousehold consumption: 67.2%
government consumption: 20.1%
investment in fixed capital: 10.5%
investment in inventories: -4.8%
exports of goods and services: 45.5%
imports of goods and services: -38.5%
(2013 est.)
Gross national saving8.4% of GDP (2013 est.)
6.6% of GDP (2012 est.)
14.2% of GDP (2011 est.)