Cyprus’s robust economic recovery has peaked, and is forecast to slow into 2018, according to analysts.
Speaking at the 3rd Offshore Investment Conference in Cyprus, Fiona Mullen of Sapienta Economics, pictured left, assessed Cyprus’s GDP growth to be around 3.5% this year, falling back to around 3.4% in 2018.
Part of the reason for the slow-down is an over-heating property market, particularly in the centres of Paphos and Limassol, the booming southern port town.
A more assured growth sector is tourism. The industry has benefited from tetchy Russian-Turkish relations in 2016, and from instability elsewhere in countries such as Egypt and Lebanon.
However, geopolitical risk is also widely viewed as a factor in the slowdown, with local disputes looming over recent oil discoveries in the Mediterranean’s massive Block 6, located off Cyprus’s southern shores.
Other factors include an unusually heavily regulated banking sector affecting demand, and a disappointing performance from SMEs.
However, it is expected that recent government tax incentives for foreign companies relocating to Cyprus could tip the balance.
This article first appeared in our sister title ‘Offshore Investment‘