Sapienta Cyprus Teaser, 28 Feb 2023
Shorter Executive Summary 28 Feb 2023
Welcome to Sapienta Cyprus Teaser, a sub-series of Sapienta Cyprus Snippets. Below is the shortened executive summary from my latest monthly Sapienta Country Analysis Cyprus: unrivalled independent analysis on all things Cyprus. Learn more about other features of Sapienta Cyprus Snippets here.
POLITICAL ANALYSIS AND OUTLOOK. The new president, Nikos Christodoulides, has announced a cabinet of technocrats and party supporters. An outpouring of sympathy after the earthquakes in Turkey may shift Cyprus problem dynamics.
ENERGY AND STRUCTURAL REFORMS. A gas pipeline from Israel to Cyprus may get traction with the new energy minister. The fallout from the golden passport saga continues.
FISCAL PERFORMANCE AND FORECAST. The government will issue a sustainable bond in early March amid strong public finances. Debt payments will peak in 2028.
BANKING SECTOR. Restructured loans declined in 2022. There is some evidence that consumers are dipping into savings. Bank of Cyprus has put the 2013 crisis behind it with the NPE ratio shrinking to 4%.
MACROECONOMIC TRENDS AND FORECAST. Real GDP growth slowed to 4.4% in the fourth quarter of 2022 but retail sales accelerated despite negative real earnings growth. Greece has benefited most from Brexit.
ECONOMY OF NORTHERN CYPRUS*. A new property tax has been introduced that will help pay for earthquake support and the Immovable Property Commission. Russians topped non-Turkish arrivals in 2022.
*Areas not under the effective control of the government of the Republic of Cyprus.