IMF: Moderate growth of 2% by 2021
The Cyprus economy will grow at a moderate rate of no more than 2% up to 2021, according to the IMF World Economic Outlook (WEO) for April.
For the medium term, the IMF predicts that the Cyprus GDP will grow by 1.6% in 2016 and by 2.0% in 2017, with the growth rate for 2016 to be slightly improved compared to the WEO on October 2015, which was 1.4%. However in the WEO of last October, the IMF had predicted a growth rate of 0.5% in 2015, while the real growth rate was 1.6%.
According to the IMF, in the fourth quarter of 2016 Cyprus GDP will grow by 1.6% (compared to the same quarter of the previous year), while growth in the fourth quarter of 2017 will reach 2.3%.
According to the WEO report, the harmonised inflation will continue in 2016 to be in negative territory, of up to - 0.3% and in the framework of the further development of the economy in 2017 will reach 1.3%.
Unemployment, according to IMF measurements, reach 14.2% in 2016 to decline to 13.0% in 2017.
The deficit in the current account will fall to 4.8% of GDP in 2016 from 5.1% in 2015 and will decrease marginally to 4.7% of GDP in 2017
The forecasts for the eurozone remain unchanged, with a growth rate of 1.5% and 1.7% in 2016 and 2017 respectively, while inflation remains at low levels at 0.4% in 2016 to accelerate in 2017 at 1.1%.
At the same time, the IMF downgraded marginally its baseline scenario for the growth rate of the world economy at 3.2% in 2016, 0.2% lower than in the WEO of last January, while for 2017 the growth rate is predicted to 3.5%.