Cyprus: Staff Report for the 2002 Article IV Consultation

IMF Staff Country Reports, February 14, 2003

Source details

After four years of strong growth, economic activity in Cyprus has tailed off since late 2001, affected by the global economic slowdown.
The authorities estimate growth for 2002 to have declined to 2.3 percent.
Inflation has risen to 2.9 percent year-over-year in December on account of indirect tax increases, but core inflation remains low.
The current account deficit is expected to have deteriorated in 2002 to 5.5 percent, on account of lower tourism receipts and temporary factors.

Growth: Estimate for 2002 is 2.3 percent, reflecting weaker tourism and declining consumer and business confidence following several years of strong expansion.
Demand shocks: Falling tourist arrivals and weakening consumer and business confidence are cited as principal near-term constraining factors.
External environment: The global economic slowdown is identified as a key influence on domestic activity.

Headline inflation: 2.9 percent year-over-year in December, attributed to indirect tax increases.
Core inflation: Described as remaining low (no numeric value provided in the source text).

Current account: Expected deterioration in 2002 to 5.5 percent, attributed to lower tourism receipts and temporary factors.