The IMF has issued Staff Concluding Statement of the 2018 Article IV Mission to Cyprus on Oct 5.
IMF has warned Cyprus that High dependence on Citizenship-by-Investment (CbI) financed investments to propel growth could pose risks for its sustainability.
The Cypriot economy continues its rapid recovery from the 2012–13 financial crisis. The growth momentum has been strong over the past three years, bringing real GDP back to its pre-crisis level. The economy grew by over 4 percent in 2017 and the first half of 2018, supported by tourism, professional services, and construction. Consumption picked up further amidst a sharp decline in unemployment.
Growth is expected to exceed 4 percent in 2018–19, driven by domestic demand.
Five years after the financial crisis, the Cypriot economy has turned the page on its recovery path. The growth momentum is strong. Fiscal performance is robust. A set of legislative reforms aimed at addressing the crisis legacy of non-performing loans (NPLs) has been approved, catalyzing the cleanup of bank balance sheets.
Cyprus is projected to maintain large primary fiscal surpluses that should reduce public debt going forward (despite a large one-off increase this year due to the CCB transaction).
Although Cyprus has maintained its external competitiveness, investment in more productive sectors is needed to sustain high economic growth.
Investment is expected to pick up further, as reflected in the pipeline of ongoing and new construction projects in residential properties, education, health and tourism infrastructure
Brexit could also affect export revenues and FDI.
Read more at IMF website
