Cyprus: Staff Report for the 2006 Article IV Consultation
IMF Staff Country Reports, February 21, 2007
Source details
- Canonical URL
- Cyprus: Staff Report for the 2006 Article IV Consultation
Other formats
Bibliographic details
- Published: February 21, 2007
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781451809909.002
Executive summary and macroeconomic developments
- Economic activity in Cyprus has recovered from a relatively weak performance in 2002–03.
- Declines in interest rates and strong capital inflows associated with Cyprus’s accession to the European Union in May 2004 spurred growth in private consumption and investment.
- Recovering tourist receipts reduced the external drag on the economy.
- The economy is experiencing rapid credit growth and brisk housing price increases.
- Total credit to the private sector accelerated recently, with mortgage lending leading the expansion.
Key findings
- Recovery: Economic activity rebounded after the weak performance in 2002–03.
- External and monetary influences: Lower interest rates and strong capital inflows tied to EU accession (May 2004) were important contributors to domestic demand growth (private consumption and investment).
- Tourism: Improved tourist receipts helped mitigate external sector weakness.
- Financial sector dynamics: Rapid expansion of total credit to the private sector, notably led by mortgage lending.
- Real estate: Brisk increases in housing prices accompanying the credit surge.
Subjects and keywords (as listed)
- Subjects: Cooperative banks, Expenditure, External debt, Financial institutions, Public debt, Public investment and public-private partnerships (PPP)
- Keywords: accession to the European Union, Cooperative banks, CR, Cyprus, Europe, exchange rate, Global, government, government of the Republic of Cyprus, IMF staff estimate, inflation criterion, ISCR, Public investment and public-private partnerships (PPP)