Cyprus - Economy

Overview: Despite occupation of the north and the consequent forced movement of population and loss of resources, the economy of the Republic has grown steadily with relatively low inflation, particularly in the tourism and offshore financial services sectors.

From the latter 1990s, the government introduced economic reforms with a view to joining the EU. The economy continued to grow strongly, until it slowed in the tougher international climate after 2000, rising to 3.9% in 2004, the year in which the Republic of Cyprus joined the EU, and 4.4% in 2007. Cyprus adopted the euro currency at the beginning of 2008 replacing the Cyprus pound.

In the occupied north, the economy has suffered from a number of factors including inflation and the weakness of the Turkish currency.

Trade: Major exports are manufactured goods, agricultural produce (especially citrus fruits and potatoes), pharmaceuticals, clothing and cigarettes. Most capital goods, transport equipment, raw materials and fuels are imported. Principal export partners are the UK, Russia, Greece, United Arab Emirates and Syria, and principal import partners are the USA, Greece, Italy, the UK, Germany and Japan.

The occupied north is unable to export directly to the EU, following a ruling by the European Court of Justice in 1994 that export documents for the island are valid only if issued by the Republic of Cyprus.