“The Cyprus Economy is characterized by macroeconomics stability,
combined with high real growth and low inflation”
Cyprus has a record of successful economic performance, reflected in rapid
growth, full employment conditions, external and internal stability, almost
throughout the post-independence period.
The underdeveloped economy, inherited from Colonial Rule in 1960, has been
transformed into, not only a major tourist destination, but also into modern
economy offering dynamic services with advanced physical and social
infrastructure. Specifically, industrial, agricultural as well as banking and
shipping sectors have been rapidly developed.
In terms of per capita income, estimated at CY Ł9.477 in 2004 (EUR 16,242)*.
Cyprus is classified, by the World Bank, among the high income countries. The
average annual rate of growth in the past five years was about 3,6%, while
average inflation rate stood 2,9% and average unemployment rate at 3,4% over
that period.
In addition, Cyprus was ranked 25th in the United Nations 2003 Index of Human
Development. Considering other socio-economic indicators such as the excellent
housing conditions, pollution free environment, and low crime rate, one may
conclude that the quality of life, standard of living and economic performance,
position Cyprus favorably among the rest European Union member-states.
The success of Cyprus in the economic sphere is attributed, among other
factors, to the adoption of a market-oriented economic system, the pursuance of
sound macroeconomic policies by the Government, as well as the existence of a
dynamic and flexible entrepreneurial community and a highly educated labour
force. Moreover, the economy has benefited from the close cooperation between
the public sectors and the social partners.
The basic characteristics of the Cyprus economy are the dominant role of the
private sector in production, the small size of the domestic market, the small
size of most business units, as well as its open character. Cyprus’s major
imports are raw materials, consumer and capital goods, transports equipment and
fuel, while major exports are pharmaceutical products, clothing, cement,
cigarettes, paper products, plastic products, potatoes, citrus fruit, wines and
furniture.
The tertiary sector of services is considered as the backbone of the Cyprus
economy (accounting for about 76,3% of GDP in 2004); reflecting the gradual
evolution of the economy from an exporter of minerals (mainly copper and
asbestos) and agricultural products (citrus) during 1960-73, an exporter of
manufacturing products (mainly clothing) at the end of the 1970s, to an
international business and service centre in the 1980s – today.
Currently, approximately 30 foreign banks have established presence and over
1200 International Business Corporations (IBCs) currently maintain fully-fledged
offices in Cyprus. Moreover, Cyprus ranks as the sixth leading maritime nation
in the world with a merchant fleet exceeding 26 million gross tonnage.
The services sector is comprised mainly of tourism, finance, insurance and
business services, trade, restaurants and hotels, transport and communication,
manufacturing services, real estate, education, and shipping.
Cyprus’s competitive advantages derive from its strategic geographical
location, favorable business climate and fiscal regime, stable macroeconomic
environment, the high educational level of the labour force, in conjunction with
the comparatively low level of graduates’ remuneration, the excellent
infrastructural facilities, the advanced telecommunications’ network and the
widespread knowledge of English.
Finally, Cyprus’s economic prospects mark favorably in light of its recent
accession to the European Union.
Main Social Economic Indicators (1985 - 2004)
GNP per capita at current prices (CYŁ)
Inflation And Unemployment Trends
EURO And USD Echange Rates to CYŁ
EURO Zone, European Union (EU25) And Cyprus
