The Statistical Service of Cyprus is seeing a negative growth rate of -4.4% of GDP in Q3 2020 compared to the corresponding quarter of 2019, confirming the forecasts by the Ministry of Finance included in the state budget, according to which the contraction of the economy on an annual basis will be limited to -5.5% instead of 7% predicted originally. It is noted that the Cypriot economy recorded a recession of -5.6% in the first half of 2020, while, based on current developments, in 2021 the economy is expected to recover with a growth rate of approximately 4.5% of GDP.
According to the European Commission’s winter forecasts, largely harmonized with the government’s estimates, the negative growth rate for the Cypriot economy compares favorably with other European countries. Indicatively, according to the European Commission, the Eurozone will shrink by 7.8% in 2020 and will record a positive growth rate of 4.2% in 2021, while the EU will shrink by 7.4% in 2020 and grow by 4.1% in 2021.
The recession of the Cypriot economy for 2020 is attributed exclusively to the implementation of emergency restrictive measures to address the negative consequences of the COVID-19 pandemic. However, as the European Commission acknowledges, the program to support the Cypriot economy in the face of the pandemic has supported jobs, disposable household income and businesses, largely curbing the impact on domestic demand, already reflected in the dynamism of consumption. /ibna