Cyprus: Selected Issues
October 5, 1998
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This Selected Issues paper examines the adequacy of Cyprus’ economic competitiveness. The paper looks at the recent behavior of conventional indicators of competitiveness, estimates Cyprus’ equilibrium real exchange rate, and provides an econometric analysis of the main determinants of service exports. The overall conclusion is that the country’s current level of the real effective exchange rate is in line with savings-investment fundamentals, but that the recent unfavorable trends in public savings and relative unit labor costs should be reversed to avoid problems in the medium term. The paper also analyzes the financial reform in Cyprus.
Subject: Balance of payments, Banking, Current account, Current account balance, Current account deficits, Exports, Financial institutions, International trade, Loans, Service exports
Keywords: bank support operation, conditions in Cyprus, CR, Current account, Current account balance, Current account deficits, current account sustainability, Cypriot bank, Cyprus, Cyprus' goods, EU accession, Exports, exports of service, Global, interest rate ceiling, ISCR, labor relations system, liberalization experience, Loans, prudent past policy, Service exports, Western Europe
Pages:
92
Volume:
1998
DOI:
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Issue:
098
Series:
Country Report No. 1998/098
Stock No:
1CYPEA0011998
ISBN:
9781451809794
ISSN:
1934-7685
