gdp

Cyprus economy on healthy trajectory, European Commission says

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Cyprus economy on healthy trajectory, European Commission says

The European Commission released a report on Cyprus’ economy, noting that GDP is expected to grow and inflation to decrease. The report also highlighted risks related to interconnections with economies within and outside the EU, as well as vulnerabilities related to debt. The GDP growth rate in 2023 was 2.4%, down from 5.1% in 2022, with expectations of rebounding growth in 2024 and 2025. The Cypriot labor market remains robust, with employment rising and unemployment expected to fall. The country’s fiscal position is strong, with a surplus expected to be maintained. Cyprus’ high integration with EU and non-EU economies makes it susceptible to economic developments in those regions, posing risks to its economy.

Morningstar DBRS keeps Cyprus at BBB, , ‘stable’ trend

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Morningstar DBRS keeps Cyprus at BBB, , ‘stable’ trend

Morningstar DBRS has confirmed Cyprus’ sovereign ratings at BBB (high) due to strong economic growth, but warned of exposure to geopolitical shocks and constraints from a small services sector. The stable trend balances favorable economic and fiscal developments against downside risks. Economic growth is driven by tourism, ICT relocations, and investment projects, with the Central Bank forecasting GDP growth to strengthen. Public debt has decreased, with further declines projected, and interest burden offset by favorable debt profile. Challenges include non-performing loans in the banking sector and low labor productivity. The ratings are supported by a stable political environment, sound fiscal policies, and EU membership.

Economic outlook remains favourable says ratings agency

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Economic outlook remains favourable says ratings agency

Morningstar DBRS rated Cyprus at a BBB (high) long-term credit rating with a stable trend, highlighting the balance between favourable economic prospects and downside risks. Cyprus recorded a real GDP growth rate of 2.5% in 2023, above the Euro area’s average of 0.4%, and reduced its debt-to-GDP ratio to 77.4% by the end of 2023. The rating is supported by a stable political environment, sound fiscal and economic policies, and a favourable government debt profile. The economic outlook for Cyprus is positive, with expectations of growth in private consumption, employment, and investment activity, partly due to Next Generation EU funds and major projects in tourism and real estate. The Central Bank of Cyprus projects real GDP growth to reach 2.6% in 2024 and 3.1% in 2025. However, risks include potential escalations in the Ukraine conflict and trade disruptions in the Red Sea.

Cyprus tourism should , ‘respect both visitors and resources’, tourism minister says

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Cyprus tourism should , ‘respect both visitors and resources’, tourism minister says

Deputy Minister of Tourism Kostas Koumis emphasized that a sustainable destination respects both its visitors and its resources, both natural and human. He made this statement during his participation at the annual tourism conference organized by the Association of Cyprus Tourist Enterprises (Stek), which was held in Nicosia. The theme of this year’s event was ‘Tourism: New Realities Demand a More Competitive Model’. Koumis highlighted the importance of tourism to the economies of Cyprus and Greece, noting that tourism contributed 12.8 percent to the GDP of Cyprus this year. He mentioned the recognition of the value of tourism on a pan-European level after 2000, especially during the pandemic, and the discussions about creating a common tourism portfolio to address challenges faced by various destinations. Koumis also discussed the need to address reduced air connectivity during winter, the threat of climate change, and the issue of seasonality in Southern European countries’ tourism sector. He proposed initiatives for European citizens to visit destinations within the union during low-visitor months with European funds and mentioned collaboration with the Ministry of Labour to improve vocational training schemes. Koumis stressed the need to improve air connectivity, enhance Cyprus’ tourism product during winter, and the importance of digital transformation in the tourism industry. Myron Flouris, Secretary-General for Tourism Policy and Development at the Greek Ministry of Tourism, discussed the impact of natural disasters on Greece and the importance of planning and prevention for resilience in tourism. Alexandros Thanos, an advisor for the Greek Tourism Confederation, highlighted the significant contribution of tourism to Greece’s GDP and the imbalance in revenue levels among the country’s regions. Stek president Akis Vavlitis emphasized the strong influence of seasonality on Cypriot tourism and called for strategic planning and expedited procedures for the arrival of workers from third countries. The discussion also covered the risks of climate change for the tourism product of countries like Greece and Cyprus and the need for tourism businesses to focus on the human factor and offer authentic experiences.

Norway keeps interest rate on hold, eyes September cut

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Norway keeps interest rate on hold, eyes September cut

Norway’s central bank maintained its benchmark interest rate at 4.50 percent, a 16-year high, and signaled a plan for a single rate cut within the year, which is fewer than most economists anticipated. Governor Ida Wolden Bache indicated a likely rate cut in autumn, possibly in September, with a potential second reduction by the end of March 2025. Following the announcement, the Norwegian crown strengthened against the euro. The forward rate curve for 2024 to 2026 remained largely unchanged, with an expected rate of 4.25 percent at the end of the current year. Norges Bank raised its forecast for economic growth, predicting mainland GDP growth in 2024 of 0.5 percent, up from a 0.1 percent expansion seen previously, with a 2025 estimate maintained at 1.2 percent. It expects core consumer prices to rise by 4.1 percent this year, less than the 4.8 percent previously seen. Core inflation was at 4.9 percent year-on-year in February, above the central bank’s goal of 2.0 percent.

Cyprus banks to maintain stability, but lower profits, says Moody, ’s

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Cyprus banks to maintain stability, but lower profits, says Moody, ’s

– Risks associated with loans for Cypriot banks are expected to decrease due to economic growth, declining inflation, and unemployment rates.
– Moody’s predicts a decline in bank profits from recent highs.
– A gradual decrease in net interest margins is anticipated due to rising deposit costs and falling interest rates, influenced by competition and high levels of private sector debt.
– Stricter loan criteria and loan restructuring efforts are improving loan quality and reducing problematic loans.
– Asset quality risks from foreclosed properties are diminishing, supported by a strong real estate market.
– The banking sector in Cyprus is characterized by a low loan-to-deposit ratio and ample liquidity reserves.
– Cyprus’ GDP is forecasted to grow by 2.8% in 2024 and 3.2% in 2025-27, outpacing the euro area by 0.8% in 2024.
– Economic growth is supported by diversification in the services sector and significant foreign direct investment projects.
– Moderate growth in the loan portfolio is expected due to the banking system’s saturation, high private sector debt, and elevated interest rates.
– Monetary policy is expected to remain restrictive, even with interest rate reductions by the European Central Bank.
– The NPE ratio is expected to decrease below 3% this year.
– The proportion of foreclosed assets relative to bank equity is decreasing, supported by the real estate market.
– Capital risks are declining, with banks completing risk release and balance sheet restructuring.
– The Common Equity Tier 1 ratio for assessed banks increased to 18.8% at the end of 2023.
– Moody’s assessment focuses on Cyprus’ two largest domestic banks, Bank of Cyprus and Hellenic Bank, which represent a significant portion of the banking system’s assets.
– The weighted average Baseline Credit Assessment of the two major banks is ba2, with a weighted average asset-based deposit rating of Baa3.

Greece must bolster flood defences and reduce water-guzzling crops, experts say

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Greece must bolster flood defences and reduce water-guzzling crops, experts say

Greece is advised to enhance river flow space and defenses in the Thessaly plain to prevent future floods. Thessaly, contributing 25% to Greece’s agricultural output and 5% to its GDP, was severely affected by Storm Daniel’s record rains last year. A plan by HVA suggests moving dykes, deepening riverbeds, and restricting construction on floodplains. Despite potential water shortages due to groundwater extraction for irrigation, HVA recommends planting less water-intensive crops. Thessaly faces a 500 million cubic meter annual water deficit, expected to rise with climate change. The proposed plan, costing about 4.5 billion euros, aims to address flood risks and water scarcity, potentially enhancing Thessaly’s agricultural competitiveness. The government is reviewing the plan for implementation. HVA also proposes tripling Lake Karla’s size to support agriculture. Public consultation on these proposals ends on March 29.

Tourism to keep head up high in 2024

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Tourism to keep head up high in 2024

– Cyprus’ tourism head, Costas Koumis, is optimistic about the tourism sector’s performance in 2024, aiming for arrivals close to the 3.97 million record of 2019.
– Despite geopolitical unrest and other challenges, the goal is to maintain tourist arrivals at similar levels to the previous year, with a possible deviation of 30,000 to 50,000.
– In 2023, Cyprus saw 3.85 million tourist arrivals, marking the third-best historical performance with a 20% annual increase, despite losing the Russian and Ukrainian markets.
– The tourism sector’s contribution to Cyprus’ GDP in 2023 was estimated at 12.8%, with tourism revenue reaching €2.99 billion, a 22.6% nominal increase from 2022.
– The average per capita expenditure in 2023 increased by 2.1% to €778, and daily expenditure rose by 11.6% to €90.
– The average length of stay for holidaymakers in Cyprus decreased to 8.6 days in 2023 from 9.4 days in 2022.
– Sea arrivals in 2023 were around 322,000, with expectations of a decrease in 2024 due to the conflict in Israel.
– Challenges for 2024 include conflicts in the Middle East, economic downturns in Germany and the UK, and an aviation sector crisis.
– Air connectivity remains the same with 55 airlines, but available seats are expected to decrease from the initial estimate.
– Tourism from Poland, Scandinavian countries, Romania, and Serbia is expected to increase, while UK and German markets remain stable.
– The government and ministry are committed to enhancing Cyprus’ tourism product, with €11.24 million allocated for 16 subsidy schemes in 2024, including €8.1 million from the EU-funded Recovery and Resilience Plan.

EURGBP gains ground following UK jobless, German CPI

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EURGBP gains ground following UK jobless, German CPI

– Euro-Sterling was trading below the mid-0.8500s during early European trading on Tuesday.
– The EURGBP cross was trading around 0.8540, gaining 0.16% on the day.
– The UK ILO Unemployment Rate increased to 3.9% in the three months to February from 3.8%.
– The number of people claiming jobless benefits in the UK rose by 16,800 in February.
– The UK Employment Change was -21,000 in January.
– The German Consumer Price Index (CPI) for February was 0.4% MoM and 2.5% YoY.
– The German Harmonized Index of Consumer Prices (HICP) for February was 0.6% MoM and 2.7% YoY.
– Upcoming data releases include the UK monthly GDP, Industrial Production, Manufacturing Production, and Trade Balance for January.

Gold extends rally above $2,160 ahead of US NFP

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Gold extends rally above $2,160 ahead of US NFP

The price of gold reached a new all-time high above ,160, influenced by a weaker US Dollar, a decline in US Treasury bond yields, and expectations for a rate cut by the Federal Reserve in June. Dovish commentary from central bank policymakers, including Fed Chair Jerome Powell and European Central Bank chief Christine Lagarde, also supported gold prices. Powell indicated the Fed is close to being confident enough to cut rates, while Lagarde suggested the ECB might ease policy in June. Additionally, geopolitical tensions and safe haven buying, particularly following a Houthi attack in the Red Sea, contributed to the demand for gold. Despite investors pulling metal out of Gold-backed ETFs, central banks remain strong buyers of gold.