Cyprus 

Cyprus country policy

Policy established 01 May 2012

• Early warning signal 500 mln euro
• - of which was used as at 2012-04-30 316 mln euro
• Open zonder beperkingen

Country class: 0

Cyprus country facts

Atradius Dutch State Business Economic Research
Country Report last updated :  4 March 2012
Country :  CYPRUS  

Political Situation 

Divided Island

Head of state
President and p.m. Demtris Christofias.

Main political parties
Progressive party of working people (Akel, communist), Democratic Rally (Disy), centre-right Democratic Party (Diko) and Movement of Social Democrats (Edek).

Internal Economic Situation
Headwinds And Downside Risks

General situation
The crisis impact was a drop in services exports and slowdown in construction, softened by large fiscal expansion causing sharp fiscal deterioration. At the same time, lower commodity price and weaker demand improved the still high current account deficit. GDP contracted (-1.9%), and since then hardly improved, also due to fall out power point plant in mid 2011, with unemployment at 7%.  As banking links with Greece are strong, Cyprus lost access to the long term debt market mid 2011, but Russia stepped in with a US$ 2.5bn loan covering 2012 (re)financing needs. Mid term growth prospects are muted due to bank lending constraints, fiscal adjustments and weak Eurozone growth, with significant downside risks.

External Economic Situation

Main sources of foreign exchange
Tourism, services, textiles/clothing, leather, food; re-exports.

Main foreign markets
EU (60%), Middle East (9%).

Main expenses of foreign exchange
Consumer goods, energy.

Balance of payments remarks
More or less balanced.