Cyprus: Now a European Top Performer

The economic growth of Cyprus keeps on exceeding all objectives, and as one the fastest growing economies in Europe, the country’s focus is now changing to make sure this impetus is maintained by enhancing efficiency, implementing change and increasing investor confidence.

Cyprus has continued on a solid growth path in recent years with key sectors flourishing, foreign investors flowing in, large scale projects and natural gas exploitation in the pipeline.

The country has outperformed international expectations and consolidated its status as a thriving economy. It rapidly recovered following the financial crisis in 2013, thanks to tough reforms to restructure and diversify its economy. Protecting its competitive edge is a key priority and Cyprus’ pro business government is determined to achieve its vision of a technology driven country focused on innovation.

Investor Credibility

Cyprus regained its investor grade in 2018, with both Standard & Poor’s and Fitch Ratings assigned BBB credit rating to long term sovereign debt. Agencies recognised the country’s strong fiscal record, stabilised banking system and robust growth outlook, with the IMF expecting growth rates in excess of 3% to 2020.  

The government has taken advantage of the successive upgrades to improve its debt profile by issuing cheaper debt with long term maturities. A 30 year old bond issue in April 2019 was more than 12 times over subscribed, and underlined Cyprus’ credibility with international investors.

Investor Incentives

Tax measures in recent years have further improved the established and transparent tax framework. These new measures promote the introduction of new equity capital as an alternative measure to excessive debt financing.

Healthy GDP

The Cyprus economy has been expanding rapidly, with robust rates and averaging 4.4% between 2015-18. The island was among the top five Eurozone performers in 2018 with an impressive rate of 3.9% compared with a Eurozone average of 1.9%.

The European Commission predicts a growth rate of 3.1% in 2019 and 2.7% in 2020. The growth his being driven by strong private demand and an expanded upgraded tourism sector after four successive years of record tourism arrivals.

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