Filenews 15 November 2024 - by Thiano Thiopoulou
Five sectors of the economy gave Cyprus the European lead – and by far – the Eurozone average, in terms of GDP growth, which is estimated at 3.8% in the third quarter of 2024, compared to the corresponding quarter of 2023.
Yesterday the Statistical Service of Cyprus and Eurostat announced data and it seems that the economy of Cyprus has accelerated very strongly compared to other European economies, boosted by domestic sectors of the economy: Hotels and restaurants, wholesale and retail trade, repair of motor vehicles, information and communications and construction.
As for the euro area, it grew by 0.4% in the third quarter, compared with 0.2% in the second quarter, according to Eurostat's latest estimate, which confirmed the previous one. On an annual basis, euro area GDP grew 0.9%, compared with a 0.6% increase in the second quarter.
GDP growth was twice as high as economists had expected and has been partly attributed to cyclical factors such as the Paris Olympics in August that boosted the French economy.
The release of the data comes almost a month before the ECB's governing council meets on interest rates (December 12) and in the shadow of statements by new US President Donald Trump who has declared that he will impose tariffs of 10% to 20% on European manufacturers.
This has exacerbated concerns about the EU's long-term growth prospects, coupled with the collapse of Germany's third-party government, raising uncertainty about the eurozone's largest economy.
What the evidence shows
Cyprus is first in Europe with a rate of 3.8% and second in the ranking in terms of accelerating growth in the third quarter of 2024 is Lithuania (2.3%), followed by Bulgaria 2.2%, Portugal (1.9%), Netherlands, Slovakia, Poland with 1.7% for each country.
For the rest of the countries, the data show a growth rate of Belgium 1%, Czech Republic and France 1.3%, Slovenia 1%, Italy and Finland 0.4%, Germany -0.2%, Estonia -0.7%, Ireland -0.2%, Latvia -1.4%, Austria -0.1%, Romania -0.2%, Sweden -0.1%.
Significantly, Germany, the largest economy in the Eurozone, continued its contraction path, with GDP falling -0.2% in the third quarter, the same path it had in the previous quarter.
Greece is one of five EU countries that have not yet released GDP data for the third quarter, which is expected to be done by the Hellenic Statistical Service on December 6. Data from Denmark, Croatia, Luxembourg and Malta were also not disclosed.
Data released by both Eurostat and the Statistical Service confirm that Cyprus' economy is resilient. The medium-term baseline presented in the Stability Programme envisages real GDP growth of 2.9% in 2024, 3.1% in 2025, 3.2% in 2026 and 3.3% in 2027.
According to the Central Bank's estimates, GDP growth for 2024 is expected to reach 3.5%, compared with 2.5% in 2023. GDP growth of 3.1% and 3.2%, respectively, is expected in 2025 and 2026. The projected path of GDP is mainly due to expected further growth in domestic demand and, to a lesser extent, foreign demand.
