Cyprus is the only Eurozone country expected to avoid the recession, having shown continued economic growth in Q1 and expected to do so throughout this year and next, according to the July Monthly economic and employment monitor by the European Commission Department for Employment, Social Affairs and Equal Opportunities.
According to the report, Cyprus’ GDP has remained relatively stable over the last few months, and growth has continued in the first quarter of 2009, from the 3.7% growth recorded in 2008, making it the only Eurozone country to avoid recession.
The report also said that the commission expects the Cypriot economy to grow by 0.3% this year, and 0.7% next year, which is much slower than previous years but impressive against the back-drop of developed economies like Italy struggling to find growth again next year. However, the EC predictions are moderate given that the Cypriot Finance Ministry has recorded a 1% growth this year already, and the IMF forecasts 2.1% growth for Cyprus in 2010.
"This relatively positive economic outlook is tempered by the substantial decline in tourist activities on the island. Over the five first months of 2009, the tourism sector's income, which accounts for 15 per cent of Cyprus’ GDP, dropped by 11.7 per cent in comparison to the same period a year earlier, and by 17.6 per cent in May alone. The authorities fear a massive 20 per cent drop in arrivals during the holiday high season, which would have dramatic consequences on the island’s seasonal employment,” the report said.
However, the report also stated that despite unemployment in Cyprus having risen continually since September to hit 5.3% in May, that Cyprus still has "one of the lowest [unemployment rates] recorded in the EU".
Cyprus property remains popular with overseas lifestyle buyers and investors, and news like this can only increase its popularity.
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