Sapienta Cyprus Teaser, 6 June 2023
What did you miss in Sapienta’s May 2023 issue?
Welcome to Sapienta Cyprus Teaser, a subcategory of Sapienta Cyprus Snippets. Below is a taster of what you missed in the May 2023 issue of Sapienta Country Analysis Cyprus. Learn more about other features of these Sapienta Cyprus Snippets here. Learn more about the flagship Sapienta Country Analysis Cyprus product here.
But before we get to that, here you can find my latest 20-minute Figure It podcast on the issue of Cyprus and hydrocarbons. You can find it here, or search for “Figure It” on your favourite podcast app.
Energy: Following the meeting of regional energy companies called by the Republic of Cyprus energy minister, George Papanastasiou, on 29-30 May, I assess the government’s new natural gas policy, whether it has any legs and outline what is likely to be required to turn the plans into reality.
Reforms: I cover the range of ongoing initiatives to tackle sanctions and improve Cyprus’ international reputation following the US and UK sanctions slapped on Cypriot individuals and companies.
Fiscal policy: I examine the source of claims that wage-indexation will cost the government EUR 1.2bn (about 4% of GDP). I explain why I am revising up my budget expenditure forecast. I also revise the budget and debt forecasts on the basis of government policies, recently revised historical data and a new expenditure model. I analyze upcoming debt redemptions due.
Banking sector: I analyze the latest results from Bank of Cyprus (BOC). I assess what is happening to restructured loans and what it tell us about the direction of the economy. I examine trends in non-performing loans (NPL) and show how an unexpected sector now has the highest NPL ratio.
Macroeconomy: I give all the reasons why I have revised up my real GDP growth forecast on the basis of recent performance across various sectors.
Politics: New efforts relating to the Cyprus problem: where are they likely to lead? How did Turkish nationals in northern Cyprus vote in the recent election in Turkey and what else does that tell us?
Northern Cyprus*: Among other things I take a good look at the local banks to see how vulnerable they might be to further Turkish lira depreciation and examine the latest data on public debt.
*Areas not under the effective control of the government of the Republic of Cyprus.