Filenews 11 June 2022 - by Theano Thiopoulou
Those who expect a substantial improvement in the situation in the retail trade and more broadly in the market in the coming period should have second thoughts, as the Central Bank estimates that inflationary pressures will continue and intensify and no improvement in the situation is expected before mid-2023 or even 2024.
In particular, the Central Bank predicts even more difficult days, with greater accuracy, as it expects higher inflation for 2022, compared to the previous forecasts it had released. Yesterday, it announced that it has completed the medium-term forecasts of June 2022 for the main macroeconomic aggregates in Cyprus for the years 2022-2024. Growth for 2022 is expected, by the CBC, to be limited to 2.7%, from 3.6% that had been expected until recently and the average inflation for the year to 7%, from 2.5% which was the completely initial estimate and from 6.8% that was its estimate a month and a half ago.
Central notes that the recovery path of the Cypriot economy, which began in 2021 after the gradual lifting of restrictions to deal with the pandemic, has been greatly affected, at least in the short term, by the impact of Russia's invasion of Ukraine. "Due to the war and the subsequent international sanctions imposed on Russia, immediate adverse economic consequences are expected to be recorded in 2022," he points out.
The Central Bank's estimate that a gradual normalisation of inflationary pressures is forecast in the years 2023-2024, at 2.8% and 1.9%, respectively, from the 7% it forecasts for 2022, is worrying.
