Today I want to give you a little peek into some of the things I found while preparing my monthly deep-dive into the Cyprus economy, energy and politics. If you are a shareholder of one of the Cyprus banks, if you are engaged in offshore natural gas or if you are an embassy or international mission you really should think about joining your peers in subscribing to Sapienta Country Analysis Cyprus because there is really nothing else like it in the market.
You can find the full transcript of the video below. This will eventually turn up as well on my YouTube channel. Note that in my haste I said GDP had been revised up by €1.4bn. It is in fact €1.2bn.
How tourism has shrunk in Cyprus
Hello, I’m Fiona Mullen from Sapienta Economics. Today is going to be a quick one because when you get this, the 31st of October, it’s going to be the deadline for my big monthly report that does a deep dive: it’s about 24 to 28 pages.
If you are invested in Bank of Cyprus or Eurobank, you need this. If you’re an embassy, you need this. If you are an energy company looking at offshore natural gas, you need those reports, okay?
But today I want to give you a little peek into some of the stuff I found while doing this report.
So Cystat has revised up GDP, okay? So the size of the Cyprus economy has gone up again, but this time by €1.4 billion [actually €1.2 billion], and this has been happening every few years.
Back in 2014, it went up by about €2 billion. and this isn’t anything non-legitimate. This is just part of being part of the European system, looking at the way you count GDP and going back and doing revisions every now and again, okay?
So, what I want to show you today very quickly is
what has that meant for some of our traditional sectors, right? So how do you do it? You go to this part of the database. You pick out all of the sectors.
You don’t need all the details. It goes down to U.
I am sure there’s a faster way of doing this but. And we actually want, we want current prices because we are looking, we’re not looking at real growth. And I honestly, I wish they’d had percent of total in here because I’m going to have to calculate it myself.
And when we get this, and then I want to save it. And if anybody knows a faster way of doing this, that doesn’t involve coding, or wants to teach me the coding, then let me know because I don’t know how else to do this.
And now I’m going to pull up, as they say in Blue Peter, one I prepared earlier.
So, not the thing you need on the day before your deadline, but I had to record this part again because it didn’t pick up what I was looking at on the screen. I hope you can see it now.
So what do we get? These are all the sectors, from A to U, and because they didn’t give me percent of total, I’ve calculated it myself, okay?
So what do we see? And the big surprise here is that accommodation and food service activities, after all the successive revisions over the years, is now only 5.9% of GDP, right?
Remember when people said it was 20% of GDP? It never actually was. But successive additions to other sectors - and I’m thinking it is probably information and communication and financial and insurance activities - successive changes to other sectors have pushed down what we thought was our biggest sector as a percentage of GDP.
So what is our biggest sector? It’s information and communications. So all those tech bros and gals, sitting in Larnaca apparently, and producing computer services.
From other data that I’ve dug into the main market for this is America and Ireland. Ireland is the EU base for a lot of big companies like Amazon, Apple, you name it. They’re all there. So Cyprus is selling computer services to the US and Ireland, and it’s now the biggest sector.
It’s not going to be the biggest employer. Accommodation and food services is still a big employer, so politically it’s important. But it’s no longer the biggest sector by any stretch of the imagination.
Now some of you’re going to say, ‘Oh, hang on a minute, Fiona, if you want to measure tourism, you should also add transport and wholesale and retail trade.’
Now, from memory, and I really don’t have time to dig into it today, about half of transport is air transport, so sure we can add that. But even in the old days, that wasn’t going to get you to 20%, okay?
So let’s say half of that gets you to 6, 7, 8, okay? About eight in a bit percent.
And then you might say, what about wholesale and retail trade? Tourists spend money, they go out, they buy T-shirts, they buy food, and so on.
And the answer to that is here. So yes, we have more tourists than we have residents. But we have 4 million tourists, staying for an average of, it’s actually less than nine days. It was about eight something.
But let’s be generous and say it’s nine days: 4 million tourists stay for nine days. How many shopping days does that give us: 36 million tourist shopping days, if you like, right?
And then we have 1 million residents, just counting people in the south, here for 365 days a year. That gives us 365 million shopping days.
So I think you can see from the big size difference in these two numbers that the biggest chunk of this sector is us going out buying milk and food and our regular things that we need, rather than tourists, okay?
So bottom line is: accommodation and food service activities is, number one, nowhere near the biggest sector of the economy. And number two, because of successive upward revisions to other sectors, it’s smaller than it ever has been, just under 6% of GDP, okay?
That’s it from me. I hope this bit records properly. Thank you.
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