The economic growth of Cyprus is expected to remain strong according to recent forecasts. GDP continues to grow at 3.1 per cent in 2019 with a predicted steady growth in 2020 of 2.7 per cent. Unemployment has dropped significantly from 8.4 per cent in 2018 to 6.7 per cent in 2019 with predictions of an unemployment rate of 5.9 in 2020.
It is clear from the figures that the Cypriot economy is healthy and reliable with steady growth, yet what factors have propelled Cyprus’s economy into such a beneficial place?
Regional Business in Cyprus Drives Economic Growth
Business in Cyprus has gone from strength to strength in recent years with President of the House Demetris Syllouris commenting “Our economy may be small, but it is open, transparent and business-friendly, and able to weather a great deal of obstacles”. He also remarked on the unique geographical location of Cyprus, a gateway between Europe and the Middle East. The benefits of the location have and continue to play a major role in the development of Cyprus alongside many multinational companies.
The proof is in the figures, in 2017 Cyprus had the biggest percentage increase in the number of high growth enterprises in the EU with 57 per cent followed by Slovenia with 20 per cent. Year after year following this the Cypriot business sectors continue to increase with high growth enterprises playing an important role to economic growth and the creation of jobs. Significant growth has been seen in the following sectors:
In the past few years the Cyprus shipping industry contributed more than one billion to the economy annually with high figures set for 2019, accounting for 7 per cent of the GDP. In the past five years an increase of 65 per cent has been noted in shipping companies registering with Cyprus, boosting the sector by 25 per cent overall.
Tourism continues to push through to new boundaries with a record of 3.6 million visitors in 2017 and just under four million in 2018 in an increase of 7.8 per cent. These impressive figures do not fall short in 2019 with an increase of 4.8 per cent for arrivals in the month of April compared to previous years.
The future for tourism remains bright in the long term with the country setting goals via a new tourism strategy. The strategy aims to double visitor arrivals, triple tourist revenue, create 47,000 jobs and attract 20 billion in new investment by 2030 according to the Cyprus Profile.
Cyprus Real Estate
The sector of real estate remains reliable and steady with healthy growth throughout the years. 2018 saw a growth of 6 per cent in Cyprus property sales with a 5 – 10 per cent growth predicted for 2019. A large majority of sales are due to foreign buyers accounting for 50 per cent of sales last year according to the financial mirror.
A new aspect to factor in is the discovery of natural gas resources offshore, presenting new opportunities for the real estate sector. Panos Danos, CEO of Danos/ BNPPRE Group commented that Cyprus has entered the gas era with his company predicting an even bigger growth of demand for real estate. “Energy employment has created major demand for office space, more efficient inventory control has caused demand for large warehouse space, land-based retail continues to grow as people have more money to spend and apartments are in large demand from young people, foreign investors and immigrants,”. These positive figures and promising future aspects due to the discovery of gas makes it clear that the real estate sector in Cyprus is flourishing with no signs of slowing down.
Financial Forex Services
Over the years the number of forex companies in Cyprus has increased, a large percentage are foreign businesses who recognise the benefits of setting up companies in Cyprus. As of April 2019, there are 676 regulated entities in Cyprus, this is a 173.7 per cent increase from 2011 where there were only 247 regulated entities.
Foreign Direct Investment in Cyprus
As many sectors within the Cyprus economy prosper it is no wonder that so many foreigners wish to invest in Cyprus. Alongside the incentive of the successful Cyprus Investment Program, the impact of foreign investment can already be seen in Cyprus as mentioned above in the real estate sector and forex sector to name just a few. Plans for continual foreign direct investment in Cyprus show no signs of stopping.
President of the House Demetris Syllouris comments “Although Cyprus’ main pillars of business are based on tourism, shipping and professional services, there is a constant attempt for improvement and innovation. With the contribution of Foreign Direct Investments rising steadily and the future prospect of Cyprus becoming an Eastern Mediterranean oil and gas centre, it is no wonder that the Cypriot economy is expanding outwards as a regional hub of business excellence”.