Economy Cyprus
Economy - overview:
The Greek Cypriot economy is prosperous but highly susceptible to
external shocks. Erratic growth rates over the past decade reflect
the economy's vulnerability to swings in tourist arrivals, caused by
political instability in the region and fluctuations in economic
conditions in Western Europe. Economic policy is focused on meeting
the criteria for admission to the EU. EU-driven tax reforms in 2003
have introduced fiscal imbalances, which, coupled with a sluggish
tourism sector, have resulted in growing fiscal deficits. As in the
Turkish sector, water shortages are a perennial problem; a few
desalination plants are now on-line. After 10 years of drought, the
country received substantial rainfall from 2001-03, alleviating
immediate concerns. The Turkish Cypriot economy has roughly
one-third of the per capita GDP of the south. Because it is
recognized only by Turkey, it has had much difficulty arranging
foreign financing and investment. It remains heavily dependent on
agriculture and government service, which together employ about half
of the work force. To compensate for the economy's weakness, Turkey
provides grants and loans to support economic development. Ankara
provided $200 million in 2002 and pledged $450 million for the
2003-05 period. Future events throughout the island will be highly
influenced by the outcome of negotiations on the UN-sponsored
agreement to unite the Greek and Turkish areas.
GDP:
Republic of Cyprus: purchasing power parity - $14.82 billion (2003
est.); north Cyprus: purchasing power parity - $1.217 billion (2003
est.)
GDP - real growth rate:
Republic of Cyprus: 1.9% (2003 est.); north Cyprus: 2.6% (2003 est.)
GDP - per capita:
Republic of Cyprus: purchasing power parity - $19,200 (2003 est.);
north Cyprus: purchasing power parity - $5,600 (2003 est.)
GDP - composition by sector: Republic of Cyprus: agriculture 4.1%; industry 20.3%; services 75.6% north Cyprus: agriculture 10.6%; industry 20.5%; services 68.9% (2003)
Investment (gross fixed):
19.9% of GDP (2003)
Population below poverty line:
NA
Household income or consumption by percentage share:
lowest 10%: NA
highest 10%: NA
Inflation rate (consumer prices):
Republic of Cyprus: 4.1% (2003 est.); north Cyprus: 12.6% (2003
est.)