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Cyprus - Economy

KEY FACTS 2004

  • GNI: US$13.6bn
  • GNI pc: US$16,510
  • GDP growth: 3.7% p.a. 2003–04
  • Inflation: 4.0% p.a. 1990–2004
  • External debt: US$6.3bn (2001)
  • Tourist Arrivals: 2,349,000

(In this section, unless otherwise stated, figures do not include the occupied north.)

Overview: Despite occupation of the north and the consequent forced exchanges 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 3.7% in 2005. In 2006 the government was preparing to adopt the the Euro in 2008.

In the occupied north, the economy has suffered from inflation, the weakness of the Turkish currency, lack of foreign investment, the EU trade ban, and a high trade deficit.

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 US, 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.