Filenews 1 May 2024
The Cypriot economy maintains its growth momentum in 2024. According to the forecasts of the Ministry of Finance, the growth rate of the economy will strengthen slightly compared to 2023 and will remain at relatively high levels, compared to the growth rate of the EU.
In particular, presenting the forecasts of the Ministry of Finance for the course of the economy in 2024, the competent minister Makis Keravnos said that the growth rate will move to levels of 2.9%, compared to 2.5% in 2023. It is noted that the EU average in terms of growth rate in 2023 was 0.4%, while for 2024 the forecast is that it will move to 0.9%.
Subsequently, inflation (harmonised index) is expected to move to 2.5% in 2024 compared to 3.9% in 2023. This indicates that inflation levels are approaching the ECB's target of 2%. As for the EU, average inflation stood at 6.4% in 2023, while the forecast for 2024 is for 3%.
In relation to unemployment, the forecast of the Ministry of Finance is that in 2024 it will fall to 5.8%, compared to 6.1% in 2023. As for the fiscal balance, it is expected to move to 3% compared to 3.3% in 2023. The current account balance will decrease to -11.9% in 2024 compared to -12.1% in 2023.
The course of public debt is interesting, as it is expected to decrease from 77.4% in 2023 to 70.6% in 2024. Public debt as a percentage of GDP is projected to fall to close to 60% by the end of 2026.
According to the Minister of Finance, the course of the Cypriot economy and the forecasts for even better days in 2024 resulted in the upgrades of the Cypriot economy by all rating agencies above investment grade, a development that is considered particularly important. As Makis Keravnos specifically mentioned, two upgrades were recorded by one notch from Fitch and DBRS and one upgrade by two notches from Moody's (within the investment category).
In this regard, it is noted that the first state budget of the Christodoulides administration provides for budgeted revenues in 2024 of €9,892 million.
Key priorities are:
- The fiscal balance should be in surplus.
- Retention of employment in the Public Sector.
- Continuation of the downward path of public debt as a percentage of GDP.
- Strengthening the green economy, digital transformation and research and innovation.
- Development through NRRP investments and projects funded by other European Funds. Creation of conditions for sustainable development in key sectors of the economy.
