Sapienta Cyprus Teaser, 30 Nov 2022
Shorter Executive Summary 30 November 2022
Welcome to Sapienta Cyprus Snippets. Below is the shortened executive summary from my monthly Sapienta Country Analysis Cyprus: unrivalled independent analysis on all things Cyprus. I shall add more features to this free-for-now service going forward. Learn more about other features of Sapienta Cyprus Snippets here.
POLITICAL ANALYSIS AND OUTLOOK. Turkey appears to be moving ahead with a naval base in north-eastern Cyprus. Attacks on the leading presidential candidate, Nicos Christodoulides, seem to be backfiring.
SECTORAL POLICIES, REFORMS AND ENERGY. The schedule for Aphrodite drilling has been formally delayed. The authorities have begun to focus on the need to upgrade the electricity grid. The rollout of new courts has been delayed.
FISCAL PERFORMANCE AND FORECAST. The budget remains on course for a surplus according to revised figures. We continue to expect rising general government budget and primary surpluses in 2022-24.
BANKING SECTOR. MPs have voted to suspend foreclosures again. Cypriot banks seem more exposed to climate risks than the EU average. The collapse of the FTX crypto currency exchange will give Cyprus more time to catch up with oversight.
MACROECONOMIC TRENDS AND FORECAST. We have revised up our real GDP growth forecast on the back of new and historically revised data. The current-account deficit widened sharply in January-June.
ECONOMY OF NORTHERN CYPRUS*. Borrowing from the Turkish Cypriot central bank has reached €14.4m this year. The airport inauguration has been postponed.
*Areas not under the effective control of the government of the Republic of Cyprus.