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| The Central Bank of Cyprus in Nicosia. In the background is the Bank of Cyprus contrasted by the old and tiny Orthodox Church of Ayia Paraskevi. EPA PHOTO / KATIA CHRISTODOULOU / European Commission |
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 are the most important sectors. Erratic growth rates over the past decade reflect the economy's reliance on tourism, the profitability of which often fluctuates with political instability in the region and economic conditions in Western Europe. Nevertheless, the economy in the area under government control has grown at a rate well above the EU average since 2000. Cyprus joined the European Exchange Rate Mechanism (ERM2) in May 2005 and adopted the euro as its national currency on 1 January 2008. An aggressive austerity program in the preceding years, aimed at paving the way for the euro, helped turn a soaring fiscal deficit (6.3% in 2003) into a surplus of 1.2% in 2008, and reduced inflation to 4.7%. This prosperity came under pressure in 2009, as construction and tourism slowed in the face of reduced foreign demand triggered by the ongoing global financial crisis. Although Cyprus lagged behind its EU peers in showing signs of stress from the global crisis, the economy tipped into recession in 2009, contracting by 1.7%, and has been slow to bounce back since, posting an anemic growth rate of 1.0% in 2010. A massive munitions blast in July 2011 at a Cypriot naval base triggered country-wide energy outages, a collapse of the governing coalition, and a cabinet shuffle intensifying Cyprus's economic problems. The economy experienced no economic growth in 2011. Serious Cypriot financial sector problems surfaced in early 2011 as the Greek fiscal crisis and euro zone debt crisis deepened. Two of Cyprus's biggest banks are among the largest holders of Greek bonds in Europe and have a substantial presence in Greece through bank branches and subsidiaries. A liquidity squeeze is choking the financial sector and the real economy as many global investors doubt the Cypriot economy can weather the EU crisis. Cyprus's borrowing costs have risen steadily because of its exposure to Greek debt. The budget deficit is on the rise and reached 7.4% of GDP in 2011, a violation of the EU's budget deficit criteria - no more than 3% of GDP. In response to the country's deteriorating finances and serious risk of contagion from the Greek debt crisis, Nicosia is promising to implement measures to cut the cost of the state payroll, curb tax evasion, and revamp social benefits. However, it has been slow to act, lacking a consensus in parliament and among the social partners for its proposed measures. |
GDP (purchasing power parity):
$23.77 billion (2011 est.)
country comparison to the world: 121
$23.77 billion (2010 est.)
$23.46 billion (2009 est.)
note: data are in 2011 US dollars
GDP (official exchange rate):
$25.7 billion (2011 est.)
GDP - real growth rate:
0% (2011 est.)
country comparison to the world: 199
1% (2010 est.)
-1.7% (2009 est.)
GDP - per capita (PPP):
$29,100 (2011 est.)
country comparison to the world: 47
$29,500 (2010 est.)
$29,500 (2009 est.)
note: data are in 2011 US dollars
GDP - composition by sector:
agriculture: 2.3%
industry: 16.4%
services: 81.3% (2011 est.)
Labor force:
411,300 (2011 est.)
country comparison to the world: 159
Labor force - by occupation:
agriculture: 8.5%
industry: 20.5%
services: 71% (2006 est.)
Unemployment rate:
5.1% (2011 est.)
country comparison to the world: 50
4.6% (2010 est.)
Population below poverty line:
NA
Household income or consumption by percentage share:
lowest 10%: NA
highest 10%: NA
Distribution of family income - Gini index:
29 (2005)
country comparison to the world: 121
Investment (gross fixed):
19% of GDP (2011 est.)
country comparison to the world: 133
Budget:
revenues:: $10.74 billion
expenditures:: $12.64 billion (2011 est.)
Taxes and other revenues:
41.8% of GDP (2011 est.)
country comparison to the world: 37
Budget surplus (+) or deficit (-):
-7.4% of GDP (2011 est.)
country comparison to the world: 181
Public debt:
66.8% of GDP (2011 est.)
country comparison to the world: 35
60.8% of GDP (2010 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
Inflation rate (consumer prices):
3.3% (2011 est.)
country comparison to the world: 68
2.4% (2010 est.)
Central bank discount rate:
1.75% (31 December 2011)
country comparison to the world: 127
1.75% (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 rate:
7.5% (31 December 2011 est.)
country comparison to the world: 140
6.815% (31 December 2010 est.)
Stock of narrow money:
$4.833 billion (31 December 2011 est.)
country comparison to the world: 97
$4.559 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:
$56.25 billion (31 December 2011 est.)
country comparison to the world: 67
$52.97 billion (31 December 2010 est.)
Stock of domestic credit:
$101.2 billion (31 December 2009 est.)
country comparison to the world: 53
$80.68 billion (31 December 2008 est.)
Market value of publicly traded shares:
$6.834 billion (31 December 2010)
country comparison to the world: 79
$4.993 billion (31 December 2009)
$7.955 billion (31 December 2008)
Agriculture - products:
citrus, vegetables, barley, grapes, olives, vegetables; poultry, pork, lamb; dairy, cheese
Industries:
tourism, food and beverage processing, cement and gypsum production, ship repair and refurbishment, textiles, light chemicals, metal products, wood, paper, stone and clay products
Industrial production growth rate:
0.7% (2011 est.)
country comparison to the world: 149
Electricity - production:
4.709 billion kWh (2008 est.)
country comparison to the world: 116
Electricity - consumption:
4.556 billion kWh (2008 est.)
country comparison to the world: 118
Electricity - exports:
0 kWh (2009 est.)
Electricity - imports:
0 kWh (2010 est.)
Oil - production:
0 bbl/day (2010 est.)
country comparison to the world: 165
Oil - consumption:
61,000 bbl/day (2010 est.)
country comparison to the world: 92
Oil - exports:
0 bbl/day (2009 est.)
country comparison to the world: 166
Oil - imports:
57,290 bbl/day (2009 est.)
country comparison to the world: 83
Oil - proved reserves:
0 bbl (1 January 2011 est.)
country comparison to the world: 121
Natural gas - production:
0 cu m (2009 est.)
country comparison to the world: 173
Natural gas - consumption:
0 cu m (2009 est.)
country comparison to the world: 170
Natural gas - exports:
0 cu m (2009 est.)
country comparison to the world: 86
Natural gas - imports:
0 cu m (2010 est.)
country comparison to the world: 181
Natural gas - proved reserves:
0 cu m (1 January 2011 est.)
country comparison to the world: 128
Current account balance:
-$2.858 billion (2011 est.)
country comparison to the world: 162
-$1.807 billion (2010 est.)
Exports:
$2.372 billion (2011 est.)
country comparison to the world: 136
$2.089 billion (2010 est.)
Exports - commodities:
citrus, potatoes, pharmaceuticals, cement, clothing
Exports - partners:
Greece 24.5%, Germany 10.5%, UK 8.6% (2010)
Imports:
$10.11 billion (2011 est.)
country comparison to the world: 95
$8.465 billion (2010 est.)
Imports - commodities:
consumer goods, petroleum and lubricants, machinery, transport equipment
Imports - partners:
Greece 19%, Italy 9.5%, Germany 9%, UK 8.4%, Israel 8%, China 5.3%, France 5.2%, Netherlands 4.6% (2010)
Reserves of foreign exchange and gold:
$1.144 billion (31 December 2010 est.)
country comparison to the world: 131
Debt - external:
$NA (31 December 2010 est.)
$32.61 billion (31 December 2008 est.)
Stock of direct foreign investment - at home:
$33.51 billion (31 December 2011 est.)
country comparison to the world: 59
$31.41 billion (31 December 2010 est.)
Stock of direct foreign investment - abroad:
$20.95 billion (31 December 2011 est.)
country comparison to the world: 41
$19.95 billion (31 December 2010 est.)
Exchange rates:
euros (EUR) per US dollar -
0.7107 (2011 est.)
0.7532 (2010 est.)
0.7198 (2009 est.)
0.6827 (2008 est.)
0.7345 (2007 est.)
Fiscal year:
calendar year
Economy of the area administered by Turkish Cypriots
Economy - overview: The Turkish Cypriot economy has roughly half the per capita GDP of the south, and economic growth tends to be volatile, given the north's relative isolation, bloated public sector, reliance on the Turkish lira, and small market size. The Turkish Cypriots are heavily dependent on transfers from the Turkish Government. Ankara directly finances about one-third of the Turkish Cypriot "administration's" budget. Aid from Turkey has exceeded $400 million annually in recent years. The Turkish Cypriot economy experienced a sharp slowdown in 2008-09 due to the global financial crisis and to its reliance on British and Turkish tourism, both of which declined due to the recession. The Turkish Cypriot budget deficit also deteriorated in 2009 due to decreased state revenues and increased government expenditures on public sector salaries and social services. The Turkish Cypriot economy declined about 0.6% in 2010.
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: 22.5%, 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) |
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