Cyprus: Country fact sheet
- Content Type
- Country Data and Maps
- Economist Intelligence Unit
- No abstract is available.
- Summary, Economy, Background, Fact sheet
- Political Geography
Annual data 2020 a Historical averages (%) 2016-20 Population (m) 0.9 Population growth 0.9 GDP (US$ bn; market exchange rate) 24.0 Real GDP growth 2.9 GDP (US$ bn; purchasing power parity) 36.2 Real domestic demand growth 5.2 GDP per head (US$; market exchange rate) 26,990 Inflation 0.0 GDP per head (US$; purchasing power parity) 40,775 Current-account balance (% of GDP) -6.0 Exchange rate (av) €:US$ 0.88 FDI inflows (% of GDP) 38.8 aActual.
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Background: The Greek Cypriot government of the Republic of Cyprus (hereafter referred to as Cyprus) is the internationally recognised government of the island, but its writ does not run in the north, which has since 1974 been occupied by Turkish troops (currently numbering 30,000-40,000). The self-declared Turkish Republic of Northern Cyprus (TRNC) is recognised only by Turkey. Decades of efforts to reunite the island have so far failed.
Political structure: Based on the 1960 constitution, a unicameral House of Representatives (parliament) is elected for a five-year term. It currently has 56 Greek Cypriot members and three special representatives of Maronite, Armenian and Latin minorities. The president, who has executive powers, is directly elected for a five-year term and appoints the cabinet (Council of Ministers). The current president is Nicos Anastasiades of the Democratic Rally (Disy), who heads a minority government after the Democratic Party (Diko) withdrew its support in parliament over the issue of the decades-old division of the island, although Diko-allied ministers remain in the cabinet. The cabinet consists of Disy ministers, Diko-allied ministers and independents.
Policy issues: Policy in 2021 will focus on stabilising the economy after the economic fallout from the coronavirus pandemic. From 2022 the focus will revert to restoring fiscal discipline and implementing structural reforms and privatisation, as agreed with the EU and the IMF in the 2013-16 bail-out programme. Resistance to structural reforms and privatisation is likely to remain strong. The exploitation of offshore natural-gas resources will constitute a major focus for the government, but is taking longer than expected.
Taxation: Tax rates are low, but many taxes have been raised as part of the bail-out programme. Dividend taxation for resident companies lifts the effective rate to almost 20%. The standard value-added tax (VAT) rate has been 19% since 2014, having been raised gradually from 15%. The employers' and employees' social insurance contribution rate is 8.3% of gross wages. The corporate tax rate is 12.5%.
Foreign trade: As a services-dominated economy, Cyprus tends to run large surpluses on trade in services, owing to tourism, shipping and exports of professional and financial services. These are normally offset by large deficits on goods.
Major domestic exports 2019 % of total Major domestic imports 2019 % of total Manufactured goods 38.7 Consumer goods 28 Industrial products of mineral origin 29.7 Transport equipment 24 Processed agricultural products 23 Intermediate goods 23 Raw agricultural products 7.4 Fuel and lubricants 18 Leading markets 2019 % of total Leading suppliers 2019 % of total Netherlands 13.1 Greece 20.3 Libya 9.9 Italy 10.2 Greece 7.4 UK 7.1 UK 6.0 Germany 6.0
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