Cypriot central bank turns down economic forcast

NICOSIA, July 27– The Central Bank of Cyprus said on Wednesday it has turned down its forecast for this year’s GDP growth by 0.9 percentage points due to the negative effects of the Ukraine crisis and the sanctions against Russia. The crisis over Ukraine has pushed up energy prices at the pump by about 42 percent and the prices of basic commodities by about 20…

NICOSIA, July 27 (Xinhua) — The Central Bank of Cyprus (CBC) said on Wednesday it has turned down its forecast for this year’s GDP growth by 0.9 percentage points due to the negative effects of the Ukraine crisis and the sanctions against Russia.

In its June economic bulletin, CBC said Cyprus’ economy was projected to grow by 2.7 percent this year, rather than the 3.6-percent predicted in December 2021.

The crisis over Ukraine has pushed up energy prices at the pump by about 42 percent and the prices of basic commodities by about 20 percent, fueling inflation of 9.6 percent on a yearly basis in June, the highest in nearly 41 years.

The central bank said that investments will be significantly supported by the absorption of funds from the European Union Recovery and Resilience Facility.

It also predicted that the economy will grow by 3.7 percent in 2023, down from an original projection of 3.8 percent, saying that growth will be driven by continued recovery in domestic demand and net exports.

In the meantime, the Economic Research Center of the State University of Cyprus reported Wednesday that its economic sentiment indicator increased by 1.4 points in July compared with June, as a result of stronger business confidence in the services and industry sectors.

“Businesses in the services sector…revised upwards their expectations on their business cycle. In industry, the improvement in the climate came from an upgrade revision of their estimates on production in the next three months,” the center said. Enditem

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