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Cyprus Cyprus

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Cyprus – Quick View
ECR score77.02 (Mar 2011)
ECR rank20 (Mar 2011)
Economic
GDP at constant (2010)USD 20.11 billion
GNI per capita PPP (2010)USD 21,962
FDI inflow (2009)USD 5,747.02 million
Inflation (2010)2.4%
Central bank assets (2009)USD 18,763.89 million
Unemployment rate (2009)5.3%
Government deficit (2010)6% of GDP
Tax revenue (2010)USD 2,475.47 million
Political
Government typePresidential Government
Recent political crisisNA
Economic freedom score18th
Freedom of information score45th
Corruption perception index28th
Structural
Birth rate11.9 per ‘000
Population balanceUnder 14 years – 16.9%
Population balanceOver 65 years – 13%
Life expectancy yearsMale – 77.9 years
Life expectancy yearsFemale – 82.4 years
Mortality rate6.5 per ‘000
Literacy rate98%
Internet access36.7%

[Top] Economic Overview

 

Gross Domestic Product (GDP) of Cyprus at current price for 2009 is estimated at EUR 16.95 billion.

 

(Source: Ministry of Statistics)

 

GDP at constant prices in 2010 was EUR 15.15 billion, an increase of 0.9% from 2009.

(Source: Ministry of Statistic)

Cyprus GDP at constant prices

(Source: Ministry of Statistic)

Cyprus GDP at current prices

(Source: Ministry of Statistics)

GDP of Cyprus experienced slow and steady growth from 2000 to 2008, but slightly declined in 2009.

The real GDP growth of the country reached its highest of 10% in 2007 and its lowest of -1.7% in 2009. The country’s economic situation in the last two years fallen.

The country’s GDP at current prices decreased to EUR 16,946.5 million in 2009, compared to EUR 17,247.8 million in 2008.

The GDP per capita at PPP was 28,044.92 in 2010 as compared to 28,503.7 in 2009 (in Current International Dollars)

(Source: Ministry of Statistics, Econstats.com)

The nation’s gross national income (GNI) per capita was EUR 20,799 in 2009, compared to EUR 20,410 in 2008. In 2010, country’s GNI per capita at PPP was registered at USD 21,962,

(Source: Ministry of Statistics, UNDP)

The exports of Cyprus constantly decreased from EUR 1,228.7 million in 2005 to EUR 970.5 million in 2009.

In 2009, imports were valued at EUR 5,691.8 million, a decrease from EUR 1,675 million of 2008.

The country recorded trade deficit of EUR 4,721.3 million in 2009.  

(Source: Ministry of Statistics)

Cyprus Export Vs Import

(Source: Ministry of Statistics)

Cyprus imports from the following regions:

 

Country

Imports (%)

European Union

Greece

19.9

Italy

10.8

United Kingdom

9.3

Germany

8.9

France

3.8

Other Countries

Israel

6.9

China

5.4

Japan

2

Brazil

0.2

Major exports from the country are pharmaceutical products, cement and food and agriculture products to:

Country

Export (%)

Greece

21.1

United Kingdom

8.5

Germany

8.3

France

3.8

Middle East regions

14.1

Asian countries

6

(Source: Cyprus at Glance)

Taxes

Tax rates in Cyprus vary for different income slabs from 20% to 30%. Tax rates as of 2009 are:


Tax Base (EUR)

Tax (%)

Up to 19,500

0

19,501 – 28,000

20%

28,000 - 36,300

25%

36,301 and over

30%

(Source: worldwide-tax.com)

Corporate tax

Standard corporate tax in Cyprus is 10%, while tax rates for Semi Government bodies are 25%.

Value Added Tax rate (VAT) levied in country is 15%. However, food and agriculture products, books and newspapers, and rural transportation have reduced VAT.  They vary from 5% to 8%.

Taxes on gifts and estate duty on inherited property is waved off in Cyprus. Additionally, property having value of less than EUR 170,860 is exempted from tax.  

(Source: worldwide-tax.com)

Inflation rate

The inflation rate in 2010 is registered at 2.4%, an increase over the previous year’s inflation of 0.3%.

Cyprus Inflation rate

(Source: Ministry of Statistics)

In the past decade the inflation rate of the country has been fluctuating from as low as 0.3% to as high as 4.7%.

FDI inflow


In 2009, Foreign Direct Investment (FDI) in Cyprus was EUR 4,122 million, as compared to EUR 2,764 million in 2008.

Cyprus FDI inflows

The top three FDI sectors in 2009 were:

 

Sectors

Share of investment (%)

Financial Intermediation

58.13

Trade and Repairs

23.68

Real Estate and Business Activities

15.73

 (Source: cipa.org)

Banking sector assets

The assets of the Central Bank of Cyprus are:

Balance Sheet – Assets of Central Bank of Cyprus (EUR million)

 

2009

2008

Gold and gold receivables

342.37

277.68

Claims on non-euro area residents denominated in foreign currency

540.85

427.89

Claims on euro area residents denominated in foreign currency

522.47

771.36

Claims on euro area residents denominated in euro

0

68.5

Lending to euro area credit institutions denominated in euro related

to monetary policy operations

7,559.4

4.370

Other claims on euro area credit institutions denominated in euro

1.29

84.61

Securities of euro area residents denominated in euro

2,473.38

2.446.05

General government debt denominated in euro

1,550.66

1.597.05

Intra-Euro system claims

259.87

203.29

Items in course of settlement

39.93

66.39

Other assets

168

378.21

Total Assets

13,458.22

10,691.0

(Source: Central Bank of Cyprus)

[Top] Financial Indicators & Government Financial

The consumer price index (CPI) in Cyprus has been on a steady rise from 2001 to 2010. The index figure for 2010 was 112.86 with a change of 2.4% over 2009.

Cyprus Consumer Price Index

(Source: Ministry of Statistics)

Base, Year 2005 = 100

Interest rates

Interest rate on the marginal lending facility

5%

 

Minimum bid rate on the main refinancing operations   

 

4%

 

Maximum bid rate on the liquidity absorbing operations

 

4%

 

Interest rate on the deposit facility  

 

3%

(Source: Central Bank of Cyprus)

Government expenditure

Government expenditures in Cyprus exceeded revenues in 2009. In the same year, Government expenditures were EUR 7861.1 million, with a deficit of EUR 1028.7 million.

 Expenditure of Government of Cyprus (Million EUR)

 

2009

2008

Total Expenditure

7,861.1

7,345.7

Compensation of Employees

3,588.3

3,336.6

Social Payments

2,335.4

2,079.3

Interest Expenditure

421.5

484.2

Subsidies

21.9

70.0

Gross Fixed Capital Formation

695.8

508.9

Other expense

798.2

866.7

 (Source: Ministry of Finance)

Official exchange rate for 2009

In 2009, USD per EUR rate was registered at 1.39, marking a decline from USD 1.47 per EUR in 2008.

Cyprus Exchange rate

(Source: Ministry of Finance)

Government finances

Fiscal balance

Cyprus Fiscal balance

P- Projected

In 2007 and 2008 the country witnessed a surplus in its fiscal balance, while the rest of the years, from 2002 to 2006, and 2009 registered a deficit. The fiscal deficit for 2010 was projected at -6% of the GDP.

(Source: Ministry of Finance)

Total revenue (2009)

The country's revenue in 2009 was recorded at EUR 6742.9 million, marking a decrease of about 10% from 2008.

Government Revenues (EUR Million)

 

2010 (Till Q3)

2009

Total Revenue

5,228.7

6,742.9

Taxes on production and imports (1)

3,257.4

2,556.1

Social contributions (2)

1,221.0

1,464.2

Current taxes on income and wealth (3)

1,335.6

1,894.5

Other current revenue (4)

89.8

807.4

Capital transfers received

6.3

20.7

Total current resources (1+2+3+4)

5,903.8

6,722.

(Source: Ministry of Statistics)

Tax revenue

Tax revenue of Cyprus in 2010 is EUR 1,864.80 million, a growth of 1% from 2009.

(Source: Ministry of Finance)

Total grants

The country received grants of EUR 19.2 million for 2009, this 149% higher then grants of 2008.

Cyprus Grants receivable

(Source: Ministry of Statistic)

Current account balance - surplus/deficit

The country has witnessed declining current account deficit from 2003 to 2008, with 2007 recording the highest deficit of 17.7% and the lowest deficit of 2.2% was noted in 2003.

Cyprus Current account balance

(Source: Ministry of Finance)

Balance of payment


Balance of Payment (EUR Million)

 

2009

2008

Current Account

-1,447.5

-3,047.0

Goods

-4,255.4

-5,546.3

Services

3,357.5

3,519.8

Income

-369.4

-984.2

Capital and financial account

1,425.5

2,957.4

Current Transfers

-180.2

-36.3

Net errors and omissions

22.0

89.7

(Source: Ministry of Statistic)

[Top] Labour Force and Employment Overview

Labour force in Cyprus was recorded at 409,584 people in Q3 2010, of which 225,164 were male and 184,420 were female. This is an increase of about 1.37% from the previous year.

(Source: Ministry of Statistic)

In Q3 2010 the labour force participation rate for the economically active population between the ages of 15 and 64 accounts to 74.4%. Labour force participation rate for males and females were 82.4% and 66.8% respectively. In Q3 2009, the total participation rate was 74.2%.

(Source: Ministry of Statistic)

Employment

Employment rate in the country during Q3 2010 was 75.7%. Number of employed person during this period was 385,993, of which males were 212,385 and females were 173,608. In Q3 2009, the number of employed people is recorded at 382,085.

Cyprus Employment by sector

(Source: Ministry of Statistic)

In Q3 2009,peoply employed in services, industry and agriculture were 73.9%, 22.1% and 4.0% respectively.

(Source: Ministry of Statistic)

Unemployment

The unemployment rate in the country during 2010 (Q3) was 5.8%. The number of unemployed persons was 23,590, of which 12,779 were male and 10,812 were female. The unemployment rate is highest amongst the 15-24 age bracket with 13%. In 2009, the unemployment rate was 5.4%, with 21,956 persons being unemployed.

(Source: Ministry of Statistic)

Minimum wage

Minimum wage limits in 2009 was EUR 859.4. The growth rate for pay was 3.6% in 2009.

(Source: Cyprus)

 

 

Year

 

 

Quarter

 

Average
Monthly
Earnings

Percentage Change (%)

 

Compared to the same
quarter of the
previous year

Compared to the        previous quarter
(Seasonally adjusted earnings)

2008

Q1

1,773

5.5

2.3

 

Q2

1,814

7.4

2.3

 

Q3

1,853

9.2

2.1

 

Q4

1,870

7.6

0.9

2009

Q1

1,888

6.7

1.0

 

Q2

1,907

4.8

1.0

 

Q3

1,907

2.6

0.0

 

Q4

1,923

3.0

0.8

2010

Q1

1,935

3.0

0.6

 

Q2

1,932

1.1

-0.2

 

Q3

1,967

3.6

1.

(Source: Ministry of Statistics)

Level of unionization

About 75% of the labour force in country is represented by unions. Trade unions in Cyprus are considered as successful for intervention, and have the ability to resolve labour related problems.

Majority of organised workers belong to either, the Pancyprian Federation of Labour Federation (PEO) or the Cyprus Workers' Confederation (SEK).  These unions represent labourers and employees in the private sector. Civil servants, teachers, bank employees and other professionals or working groups, have their own unions.

Various unions in Cyprus are:

  • International Labour Organization
  • AGROTIKI - Pancyprian Farmers' Union
  • DEOK - Democratic Labour Federation of Cyprus
  • EKA - Union of Cypriot Peasants
  • ETYK - Cyprus Union of Bank Employers
  • O.E.L.M.E.K. - Organisation of Secondary School Teachers of Cyprus
  • PA.SI.PI. - Pancyprian Union of Pilots
  • PANAGROTIKOS
  • PASYDY - Pancyprian Civil Servants Union
  • PEO - Pancyprian Federation of Labour
  • POED - Pancyprian Greek Teachers Organisation
  • SEK - Cyprus Workers' Confederation

 (Source: Cyprus.gov)

[Top] Political Stability

Cyprus is an independent Sovereign Republic with a presidential system of government. Thus the President is both the Head of State and Government.

The current president, Demetris Christofias, is the leader of communist party, and has been in reign since February 2008.

The Various Political Parties in Cyprus are:

  • The Progressive Party of Working People (AKEL)
  • Democratic Rally Party
  • Democratic Party
  • European Party
  • Ecological and Environmental Movement
  • The Movement for Social Democracy

(Source: Cyprus.gov)

Regulatory environment in Cyprus

The President is elected by universal suffrage for a five year term. Executive power is exercised through a Council of Ministers, who are appointed by the President.

Cyprus Economic Feedom Index

(Source:Heritage.org)

Cyprus' economic freedom score is 73.3, making its economy the 18th freest in the 2011 Index. Cyprus ranks 9th out of the 43 countries in the European region. Cyprus’ overall score is higher than the global and regional averages, making it one of the most free in terms of business.

Corruption perception

The Corruption Perceptions Index (CPI) is a survey to measure the perceived level of corruption across countries worldwide. Cyprus is ranked 28th on this CPI list, indicating low corruption levels in public departments across the country.

CPI ranking in Cyprus dipped from 27th in 2009 indicating a slight increase in the perceived levels of corruption.   

(Source: transparency.org)

Freedom of Information

Media in Cyprus is safeguarded by the constitution.

Cyprus is ranked 45th on the World Press Freedom Index 2010, a decline from its 25th rank in 2009.

(Source: rsf.org,BBC)

The famous newspapers in Cyprus are:

  • Cyprus Mail
  • The Cyprus Weekly
  • Politis
  • Simerini
  • Kibris Gazete

Radio broadcasters in Cyprus are:

  • Cyprus Broadcasting Corporation (CyBC)
  • Radio Proto
  • Astra 92.8
  • Bayrak Radio-TV

Judicial system

Judiciary system in Cyprus is established under the constitution as an independent authority from state powers, and autonomous in its jurisdiction.

Courts in Cyprus are organized in a two-tier system:

  • The Supreme Court
  • First Instance Courts

The Supreme Court is the final appellate court in Cyprus. It can analyse the constitutionality of laws, rules and regulations. It holds sole authority to review the legality of acts.

First instance courts are district courts composed of District Judges, Senior District Judges and Presidents of District Courts.

The other first instance courts are:

  • The Assize Courts
  • The Military Court
  • The Industrial Disputes Court
  • The Rent Control Courts
  • The Family Courts

(Source: Cyprus.gov)

[Top] Demographic Overview

The total population of Cyprus for 2009 was 892,400, an increase of about 0.8% from 2008.

(Source: Ministry of Statistic, Ministry of Statistic)

Cyprus Population by gender

The gender ratio in the country is almost balanced.  There are about 94.9 males for every 100 females in the country.

(Source: UN)

Cyprus Population projection

(Source: Ministry of Statistics)

Mortality rate

In 2009, the mortality rate of infants (per 1,000 live births) was registered at 3.3. The mortality rate for adults in 2009 was recorded at 6 deaths (per 1,000) for females, and 7 deaths (per 1,000) for males. The crude death rate in country (per 1000 population) was recorded at 6.5 in 2009.

In 2009, the average life expectancy in Cyprus for males is 77.9 years and for females it is 82.4 years.

(Source: Ministry of Statistic)

Cyprus Population distribution by age

(Source: Ministry of Statistics)

International migrant stock was recorded at 154,300 people in 2010, making up approximately 17.5% of the entire population.

(Source: UN)

Cyprus is one of the most urbanized countries of European Union. However,the standard of living in rural area is well maintained. In 2009, 70.2% of the population resided in urban areas, maintaing the consistency of the past years.

 Cyprus share of urban population

The urban population in the country grew at an annual rate of 1.3% between 2005 and 2010. For the same period, the rural population grew at a slower rate of 0.4% per year.

(Source: UN, Princeton.edu)

Ethnic Environment

Ethnic groups in Cyprus are:

  • Greek
  • Turkish
  • Others

A large proportion of the population in Cyprus are Greek Orthodox, making up 78% of the population, and nearly 18% people are Turkish.

(Source: infoplease.com)

The country is ranked 35th out of 169 countries on the Human Development Index (HDI) of 2010 conducted by the United Nations, placing it amongst the highest nations for human development. The HDI provides a composite measure of three dimensions of human development: living a long and healthy life (measured by life expectancy), being educated (measured by adult literacy and gross enrolment in education) and having a decent standard of living (measured by purchasing power parity, PPP, income). 

(Source: UNDP)

[Top] Soft Infrastructure

The country’s literacy rate was estimated to be 98% in 2008.

(Source: World Bank)

The Ministry of Education in  the country considers primary education as an essential and fundamental stage of education. Education is compulsory up to the age of 15. Primary and Secondary level of education is provided free in Cyprus. The country ranks high in terms of third level of education. More than 50% of the students study abroad in the following countries: Greece (55%), United Kingdom (35%) and USA (2%)

Education system in Cyprus consist of following stages

  • Pre-Primary education
  • Primary education
  • Secondary education
  • Higher education

Universities for higher education in the nation are:

Public Universities:

  • The University of Cyprus
  • The Open University of Cyprus
  • The Cyprus University of Technology

Private Universities

  • European University- Cyprus
  • Frederick University- Cyprus
  • University of Nicosia- Cyprus

 (Source: highereducation.ac)

Cyprus Educational attainment

In 2009, Government expenditure on education was 7.8% of GDP as compared to 7.5% of GDP in 2008.

Cyprus Government expenditure on education

(Source: Ministry of Statistic page 112)

Health care

The country provides priority to its health care system and actively promotes preventive medicine. State hospitals provide free medical services and private health insurance is available at low cost.

Cyprus Expenditure on health

(Source: Ministry of Health)

[Top] Hard Infrastructure

Mass public transport in the country is not developed, as Railways are not available.

However, Cyprus has a well developed road network. The various modes of road transport are bus, taxi and car.

Ports:  Major ports in Cyprus are – Dhekelia, Port of Famagusta, Larnaca Port and Limassol Port.

Source: (world port source)

Airports

There are four major airports in the country:

 

Town

Airport name

Runway length (ft)

Akrotiri

Akrotiri AB

8,900

Kingsfield

Kingsfield AB

4,000

Larnaca

Larnaca Intl

9,800

Pafos

Pafos Intl.

8,800

(Source: Air charter world)

Telecommunications networks

In 2010, 433,800 people, 36.7% of the total population, use internet services.

(Source: Internetworldstats.com)

Cyprus Internet access

(Source: Ministry of statistics)

In 2009the majority of internet connections were subscribed through Broadband (DSL, Cable Modem and Others), accounting for 92.2% of the total subscription.

Mobile subscribers in Cyprus (per 1000 inhabitants) have significantly increased over the last five years, while the landline connections including analogue telephone lines and ISDN lines have witnessed a decline.

Cyprus Telecommunication

(Source: Ministry of Statistics)

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