Cyprus is a resilient Island proving that fact time and time again over the past few years. The island has one of the fastest-growing eurozone economies thanks to flourishing sectors such as foreign investment, tourism, property development and now natural gas exploitation. The countries priority in 2020 is now to ensure and maintain the momentum of growth by improved efficiency and strengthening investor confidence. So, what will the economy look like in 2020?
In 2018 Cyprus regained investment grade, Standard Poor & Fitch Ratings assigning a BBB- credit rating to long-term sovereign debt. It is clear that agencies recognised Cyprus potential and stability with the IMF expecting growth rates in excess of 3% to 2020. Cyprus government has used the rating to its advantage by improving its debt profile, issuing cheaper debt with longer maturities. In April 2019 a 30-year bond was issued and was more than 12 times oversubscribed showing how international investors view the credibility of Cyprus.
Cyprus has seen a healthy GDP growth with rates averaging 4.4% from 2015-2018 resulting in the island is among the top five eurozone performers. Health growth for Cyprus continues with a 3.1% growth in 2019. With strong sectors driving growth such as private demand, growing employment and an improved tourism sector in 2020 a growth of 2.7% is predicted.
Due to improved opportunities and investments, the amount of jobs available in Cyprus has increased significantly in the past several years. From an unemployment rate of 16.1% in 2014 the rate has fallen to just 6.9% in 2019 with predictions of an even greater reduction in 2020. As more and more people work and earn money general spending in many sectors such as real estate, restaurants and shops has increased and benefited the overall economy.
As Cyprus is a member of the EU more than half trade in goods is within the EU with the country achieving strong numbers. The main exports for Cyprus are sent to Greece and the UK for commodities such as mineral origin, pharmaceutical products, and food products. The main imports for Cyprus are hydrocarbons, machinery, chemicals, vehicles and metals such as iron and steel. Cyprus has a small economy that is open, a range of new incentives have been implemented in 2019 and will be going forward into 2020. The incentives aim to attract and renew interest in large scale projects and developments. Other incentives focus on shipping and tourism.
The last few years have muted inflation with a decline of 1.2% in 2016 due to low oil prices and high unemployment. The EU consumer price index rose by just 0.7% in 2017 and 0.8% in 2018, 2019 saw an increase of 0.9% with predictions of 1.1% increase in 2020 according to the EU commission. Earnings on the island have been rising in 2019 and are expected to increase in 2020.
Following some changes in 2019, the Cyprus Investment program remains a competitive and appealing option for those looking to gain a second passport. Cyprus is able to provide a Cypriot passport for those who invest a certain amount of money into real estate. Due to the appealing factors that Cyprus has to offer such as tax, lifestyle, education and travel to name just a few this program continues to draw international investment to the island with many purchasing luxury villas or investing in the development of new real estate and projects that benefit the island and economy as a whole.
With newfound gas, the opportunities for Cyprus have increased. Following a year of negotiation in 2019, an agreement has been reached that will allow Cyprus to become a producer offering an alternative source of gas to the EU and the ability to provide gas in the Eastern Mediterranean. The product contract ensures that Cyprus will receive an average yearly income of 520 million dollars over the 18-year lifespan of the gas field. This will benefit the Cypriot economy greatly, not just in 2020 but beyond creating a stable economic backdrop for the growth and development of the island further.
With all the main elements of the economy on the rise, in 2020 we are committed to meet the growing demand of the economy in the real estate sector. The Cyprus Investment Program is an important part of the success of Cyprus and will continue to play a vital role. We are dedicated to supporting the program by developing appropriate properties such as luxury seafront properties and supporting and processing applications efficiently, this will ensure continued foreign investment in the island of Cyprus that will continue to benefit the economy in 2020 and beyond.
Cyprus is not only resilient, but it is flourishing. 2020 shows no signs of slowing as the economy remains healthy and continues to grow benefiting many sectors. In 2020 Cyprus is the place to be.
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