Economy

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.

Turkish Cypriot two-state proposal , ‘cannot be accepted’, says Kombos

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Turkish Cypriot two-state proposal , ‘cannot be accepted’, says Kombos

Fact: Foreign Minister Constantinos Kombos stressed the necessity to fully commit to the United Nations Charter after meeting with his Kazakh counterpart in Astana and stated that a two-state solution to the Cyprus problem proposed by the Turkish Cypriot leadership “cannot be accepted.”

Once burnt, investors curb enthusiasm for India, ’s startups

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Once burnt, investors curb enthusiasm for India, ’s startups

Fact: India’s startups raised about 0 million in January and February, signaling a slow year after a six-year low of just billion in 2023.

SB 546 would end two business subsidies, cut corporate tax rate – The Sentinel

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SB 546 would end two business subsidies, cut corporate tax rate - The Sentinel

Under Senate Bill 546, corporate income taxes in Kansas would be reduced to 5.75%, and two business subsidies – PEAK and H-PIP – would be discontinued. Recipients of PEAK may retain or be refunded 95% of the payroll withholding tax of qualified employees for new jobs created in Kansas. Businesses participating in H-PIP receive a 10% tax credit for capital investment. The state’s current corporate tax rate of 6.5% would be gradually reduced under the legislation. Testifying in support of the bill was Dave Trabert, CEO of the Kansas Policy Institute, who argued that tax subsidies do not work for the economy or taxpayers. Jonathan Leuth of Americans for Prosperity – Kansas supported the bill, emphasizing the need for tax reform to remain competitive. Tim Henry, CFO of Great Plains Manufacturing and Kubota North America, opposed the bill, stating it would be detrimental to investment. Sam Sackett with Sprint AeroSystems saw merit in both lowering the corporate tax rate and preserving incentive programs. Mitch Robinson with the Kansas Economic Development Alliance also opposed the bill, highlighting disparities in H-PIP participation across counties.

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.

Sterling hovers near one-month low on rate cut bets

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Sterling hovers near one-month low on rate cut bets

– The pound was stable on Monday, close to its lowest level in a month, due to increased bets that the Bank of England (BoE) will cut interest rates in June.
– Sterling was flat at .2608, near the one-month low of .2576 from the previous Friday.
– The euro was slightly changed against the pound at 85.79 pence, down from a two-month high of 86.02 pence on Friday.
– The pound fell approximately 1% against the dollar last week after the BoE maintained interest rates at 5.25% and Governor Bailey indicated that inflation is trending towards allowing for interest rate cuts.
– Bailey’s comments to the Financial Times about rate cuts being “in play” this year further decreased the pound’s value.
– Market traders now estimate a roughly 75% chance of a BoE rate cut by June, an increase from about 35% at the beginning of the previous week, influenced by data showing faster-than-expected inflation decline.
– Chris Turner from ING suggested that the BoE’s dovish communications could lead to the euro rising to 87 pence against the pound in the next month.
– In contrast, stronger-than-expected U.S. economic and inflation data has led to reduced expectations for a Federal Reserve rate cut in June, enhancing the appeal of American bonds and supporting the dollar.
– The dollar index was approximately flat at 104.38 on Monday, after a 1% increase the previous week.

Pushing out plastic in consumer-goods packaging

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Pushing out plastic in consumer-goods packaging

Cellulose fibers are being used as a sustainable packaging option for various products including foods and electronics. Retailers Carrefour and U-Group, in Belgium, France, and Luxembourg, plan to test packaging made from cellulose fibers for items like yogurts, cheeses, and juices in 30 to 60 stores by the end of the year. This initiative is part of the R3PACK project, funded by the EU, aiming to replace plastic packaging with fiber-based alternatives. The project involves food producers and packagers like Candia and Thiolat and is set to expand to thousands of stores by May 2025. Europe generates nearly 190 kilograms of packaging waste per person annually, with almost a fifth being plastic in 2021. The R3PACK team is also exploring reusable packaging options. A Swedish startup, Yangi, has developed a competitive cellulose-based packaging using a less energy- and water-intensive manufacturing process called “dry forming.” This new packaging can be recycled in existing paper-recycling systems. In December 2023, EU governments agreed to amend legislation on packaging waste to promote reuse and recyclability, aligning with the European Green Deal’s circular economy goals.

Accenture fans IT industry spending gloom with annual forecast cut

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Accenture fans IT industry spending gloom with annual forecast cut

Accenture, an IT services provider, reduced its fiscal-year 2024 revenue forecast due to an uncertain economy leading clients to reduce spending on consulting services, which resulted in a 5.6% drop in its shares in premarket trading. The company now expects a full-year revenue growth of 1% to 3%, down from the previously forecasted 2% to 5%. Accenture has faced sluggish demand for its IT and consulting services, prompting layoffs and severance-related costs of 0 million this fiscal year, following .1 billion the previous year for cutting around 19,000 jobs, or 2.5% of its workforce. Rivals Tata Consultancy Services and Infosys also reported lower quarterly results earlier in the year. Analysts from Baird Equity noted a deceleration in industry growth over the past six quarters and suggested it might take years for Accenture to return to mid- to high-single-digit organic growth. The company forecasted third-quarter revenue between .25 billion and .85 billion, below the estimated .01 billion. New bookings fell 2% to .58 billion for the second quarter, with revenue for its Communications, Media & Technology segment decreasing by 8% year-over-year. Accenture reported a revenue of .80 billion, slightly below the analysts’ estimate of .84 billion, and an adjusted earnings of .77 per share, compared to the estimated .66 per share.

Voters are shifting in search of security

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Voters are shifting in search of security

Socially conservative parties, often supported by individuals negatively impacted by globalization, are gaining votes from those who feel left behind economically and culturally. Politicians are perceived as detached from public concerns, contributing to a shift in voter behavior towards prioritizing security and identity issues. This trend benefits right-wing and far-right parties, as voters seek solutions to economic and identity crises, leading to a decline in support for traditional left-wing parties. The economic situation remains a primary voting criterion, but it’s increasingly intertwined with security concerns, especially post-pandemic and due to geopolitical tensions like the war in Ukraine. Voter abstention, particularly among the youth, is rising due to distrust in the political system and a belief that voting does not effect change. The political landscape is witnessing a shift towards more conservative stances on issues like immigration, challenging traditional parties to adapt or risk losing relevance. Social media has transformed political communication, enabling direct interaction between politicians and voters but also increasing scrutiny and the speed at which information spreads. To succeed, political candidates and parties must clearly articulate their unique selling points and effectively communicate them to the electorate, adapting to changing voter preferences.

Cyprus banks: interest rate policies harming borrowers and savers

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Cyprus banks: interest rate policies harming borrowers and savers

By December 2023, interest rates on Cyprus bank loans for house purchases had reached an average of 5.1%, compared with the average rate of 3.8% for other euro area countries. The average interest rate on Cyprus bank loans to corporations was 5.7% in December 2023, exceeding the euro area average of 5.1%. Cyprus banks had increased their profits by 600% to over €1.1 billion in 2023. The interest income of the two largest banks increased by €830 million between 2022 and 2023, mainly due to higher interest receipts from the ECB. Cyprus banks deposited around 35% of their assets at the ECB, earning from 2% to 4% in interest in 2023. Cyprus banks offered an average interest rate of 2.06% on fixed term deposits in January 2024, compared with an average deposit rate of 3.21% in the euro area. The net interest margins for Cyprus banks exceeded three percentage points, while the average for the euro area was just over one percentage point. The Bank of Cyprus announced that €112 million of their after-tax profit of €487 million would be distributed as cash dividends to shareholders, with a share buyback of up to €25 million.