Cyprus has an open free-market economy, which is based on services. Cyprus became a full member of the EU on May 1, 2004, which has been an important milestone in its economic development. For several years, the growth rate of its GDP has been stagnant, but the Greek crisis and the extreme weakness of the national banking system triggered a negative growth of -8.7% in 2013. This recession should remain in 2014 with a growth rate of -4%. The European rescue package singled out the bank deposit and the people feel betrayed by Europe.
The current situation in Europe and specifically the Greek crisis have profoundly affected the country since 2011 and has continued to hinder its development in 2013. Rating agencies have lowered the country's note and since mid-2011, the country no longer enjoys access to the financial markets to obtain refinancing options. The powerful banking sector was strongly exposed to the Greek risk. Generally, Cyprus remains largely dependent on the economic health of its neighbours. The unemployment rate, which for a long time remained under 5%, skyrocketed from 9.5% in 2012 to 16.1% in 2013.
The debt of Cyprus went from 61.3% of GDP in 2010 to 124% in 2014.
|Main Indicators||2011||2012||2013||2014||2015 (e)|
|GDP (billions USD)||24.88||22.78||21.92e||21.34e||21.41|
|GDP (Constant Prices, Annual % Change)||0.4||-2.4||-5.4e||-3.2e||0.4|
|GDP per Capita (USD)||28,858||26,131||24||23,955||23,783|
|General Government Gross Debt (in % of GDP)||71.5||86.6||111.5e||117.4e||126.0|
|Inflation Rate (%)||3.5||3.1||0.4||0.0||0.7|
|Unemployment Rate (% of the Labor Force)||7.9||11.9||15.9||16.6||16.1|
|Current Account (billions USD)||-0.84||-1.57||-0.41||-0.23||-0.18|
|Current Account (in % of GDP)||-3.4||-6.9||-1.9e||-1.1e||-0.8|
Source: IMF - World Economic Outlook Database , Last Available Data
Note: (e) Estimated Data
In the past two decades, Cypriot economy has shifted from agriculture to light manufacturing and most importantly services.
In 2013, the agricultural sector contributed around 2.4% to the GDP and employed 3.7% of the active population. The traditional agricultural sector suffers from persistant droughts. Only 15% of the land is arable in Cyprus. The main crops are wine grapes, potatoes, cotton and fruits. Mineral resources are limited and include mainly copper, pyrites, chrome, asbestos, and gypsum.
The manufacturing industry (mainly industrial food-processing, paper, chemical products, textiles, metal products, and petroleum refining) accounted for 15.9% of the GDP in 2013, but its competitiveness is declining mainly due to high-cost labor. It currently employs 19.6% of the active population.
The tertiary sector contributes to 81,7% of the GDP and employed 77% of the active population in 2013. Tourism and maritime transportation are considered to be the two pillars of the Cypriot economy. Offshore activities are led by foreign-capital companies based in Cyprus, whose commercial activities are executed exclusively outside Cyprus, giving them substantial tax benefits. Cyprus has the sixth largest shipping fleet in the world.
Currently, the sectors of tourism, real estate and financial services are the main industries in Cyprus.
|Breakdown of Economic Activity By Sector||Agriculture||Industry||Services|
|Employment By Sector (in % of Total Employment)||2.9||20.2||76.9|
|Value Added (in % of GDP)||2.1||19.6||78.3|
|Value Added (Annual % Change)||-1.9||4.1||3.7|
Source: World Bank - Last Available Data.
|Euro (EUR) - Average Annual Exchange Rate For 1 USD||0.72||0.76||0.72||0.78||0.76|
Source: CIA - The world factbook - Last Available Data.
The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labor freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.
The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.
The geographical location of Cyprus (the country being a bridge between West and East), along with its good airline and telecommunication infrastructures, have enabled the country to turn itself into an important regional and international business center.
The country's foreign trade is mainly oriented towards the EU, its main trading partner which represented more than 50% of its trade in 2013. Thanks to its favorable location at the crossroads of Europe, Asia and Africa, Cyprus also has solid trade relations with Central Europe, Eastern Europe and the Middle East.
Cyprus' three main export partners are Greece, Israel and the UK. The main export commodities are pharmaceutical products, electric & electronic equipment, as well as agricultural products, livestock products and their derivatives. The three main import partners are: Greece, the UK and Germany. Cyprus mainly imports hydrocarbons, vehicles, machinery, iron and steel.
Cyprus' trade balance is traditionally in deficit because the country has to import extensively in order to satisfy domestic demand. Cyprus also depends on imports for its energy supplies. Exports are nevertheless vital for the country's economy. As a fact, the Cyprus territory is not too extensive and the international trade market is very important.
|Foreign Trade Indicators||2009||2010||2011||2012||2013|
|Imports of Goods (million USD)||7,835||8,569||8,677||7,296||6,292|
|Exports of Goods (million USD)||1,258||1,402||1,818||1,737||1,959|
|Imports of Services (million USD)||4,047||3,180||3,631||3,585||3,279|
|Exports of Services (million USD)||9,665||7,831||8,524||7,781||7,527|
|Imports of Goods and Services (Annual % Change)||-19.3||3.1||-||-||-|
|Exports of Goods and Services (Annual % Change)||-11.4||0.6||-||-||-|
|Imports of Goods and Services (in % of GDP)||45.6||46.6||-||-||-|
|Exports of Goods and Services (in % of GDP)||40.3||40.1||-||-||-|
|Trade Balance (million USD)||-5,275||-5,410||-5,202||-4,154||-3,337|
|Trade Balance (Including Service) (million USD)||-1,281||-1,444||-1,059||-712||408|
|Foreign Trade (in % of GDP)||85.8||86.7||-||-||-|
Source: WTO - World Trade Organization ; World Bank , Last Available Data
(% of Exports)
|See More Countries||60.4%|
(% of Imports)
|See More Countries||43.4%|
Source: Comtrade, Last Available Data
|- bn USD of products exported in 2013|
|Medicaments consisting of mixed or unmixed...Medicaments consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses incl. those in the form of transdermal administration or in forms or packings for retail sale (excl. goods of heading 3002, 3005 or 3006)||13.4%|
|Powered aircraft e.g. helicopters and aeroplanes;...Powered aircraft e.g. helicopters and aeroplanes; spacecraft, incl. satellites, and suborbital and spacecraft launch vehicles||9.8%|
|Cheese and curdCheese and curd||4.8%|
|Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals||4.3%|
|Potatoes, fresh or chilledPotatoes, fresh or chilled||3.3%|
|See More Products||64.4%|
|- bn USD of products imported in 2013|
|Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals||27.5%|
|Medicaments consisting of mixed or unmixed...Medicaments consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses incl. those in the form of transdermal administration or in forms or packings for retail sale (excl. goods of heading 3002, 3005 or 3006)||3.3%|
|Motor cars and other motor vehicles principally...Motor cars and other motor vehicles principally designed for the transport of persons, incl. station wagons and racing cars (excl. motor vehicles of heading 8702)||2.6%|
|Transmission apparatus for radio-telephony,...Transmission apparatus for radio-telephony, radio-telegraphy, radio-broadcasting or television, whether or not incorporating reception apparatus or sound recording or reproducing apparatus; television cameras; still image video cameras and other video camera recorders; digital cameras||1.8%|
|Cigars, cheroots, cigarillos and cigarettes of...Cigars, cheroots, cigarillos and cigarettes of tobacco or of tobacco substitutes||1.5%|
|See More Products||63.2%|
Source: Comtrade, Last Available Data
|- bn USD of services exported in 2012|
|- bn USD of services imported in 2012|
Source: Comtrade, Last Available Data
The world rankings, published annually, measures the violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire sent to partner organizations,150 RWB correspondents, journalists, researchers, jurists and activists of human rights, including the main criteria - 44 in total - to assess the situation of press freedom in a given country. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).
The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.
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