Cyprus on the road to recovery
With the economic outlook for the EU beginning to take a turn for the better, the latest good news comes from the European Bank for Reconstruction and Development (EBRD) which has forecast that Cyprus’ economic recovery is set to continue into 2018.
Its most recent Regional Economic Prospects report reveals that the Cypriot economy had performed well again in 2016 after a return to growth in 2015. Expansion of 2.8% last year was higher than originally forecast.
Levels of consumer confidence in Cyprus are currently higher than the EU average.
While the EBRD sees overall growth as likely to continue in 2017 and 2018 at between 2% and 2.5%, however, it also warns that significant headwinds remain, including the very high levels of indebtedness in the economy, and the large legacy of non-performing loans which still account for nearly half of all loans in the country.
Nevertheless, the Bank’s Deputy Director for Country Economics and Policy, Peter Sanfey, remains optimistic about the long-term outlook for the Cypriot economy.
“It’s a very open economy,” he said. “The people are well educated, public administration functions well and some sectors are quite robust — tourism, obviously, and accounting services too, as well as some of the other high-value service sectors, which have come through quite well.”
Looking at the region more widely, the Bank notes that, in southeastern Europe, average growth is also forecast to reach the 3% mark and even Greece is expected to return to growth as reforms advance further and business confidence gradually improves.