Economy of Cyprus to keep growing
The Cypriot economy in 2021 recovered the output lost during the 2020 Covid crisis and will continue to grow at an average rate of 3.7% in the years 2022–2024, the Central Bank of Cyprus expects. In its economic bulletin, it also stresses that risks to the baseline scenario are balanced, albeit slightly on the upside concerning inflation.
The Central Bank of Cyprus said that following the downturn of 5.2% in 2020, the economy is projected to bounce back with 5.6% in 2021, followed by a growth rate of 3.6%, 3.7% and 3.8% in 2022, 2023 and 2024 respectively.
The growth drivers will be the recovery of domestic consumption and net exports, the CBC said, forecasting a continued reduction of unemployment, which is estimated to decline to 5.6% by 2024.
The CBC projects a significant rise in inflation, estimated to reach 2.2% in 2021 and 2.5% in 2022, mainly due to the sizable price increases in energy and supply bottlenecks.
Inflation will be moderate in the coming years, with the CPI estimated to decline to 1.2% in 2023 and 1.5% in 2024. On tourism, the CBC said the industry’s performance was better than anticipated, with arrivals in January-October at 46% of the pre-COVID levels.