Salar posted on May 28, 2016 11:53
The Cyprus economy is now stable, with GDP expected to continue to grow at around 2% in years 2016-2015 (in 2015 GDP grew by 1.6%). Property sales are increasing at a steady rate and with a recent significant find of oil and gas off the coast of Cyprus ¬ this trend is expected to continue. It has been suggested that this Oil and Gas find could double Cyprus¹ population over the next 10 years as many companies relocate to the island, which has one of the lowest corporation tax rates in EU; just 12.5%.
The real estate sector is improving after years of recession. According to latest available data by the land registry, property sales in Cyprus increased by 28% in the first two months of 2016.
Property sales in Cyprus surged by 54% in February compared to the same month last year, according to official figures issued by the Department of Lands & Surveys. This 54% rise in February follows a 2% rise in January and a 13% rise in December 2015.
From Land Registry figures available March 23rd, of those monthly sales, 86% were deposited by domestic (Cypriot) purchasers, while 14% were deposited by overseas (non-Cypriot) purchasers. It is clear that the surge in property sales is due primarily to increased demand from the domestic market and not reliant on foreign sales.
Realtors expect the best year since 2008 in the residential real estate sector.
GDP GROWING ¬ RECESSION IS OVER
Economic recovery is underway. GDP grew 1.6% in 2015, following three years of contraction resulting in a cumulative 11% loss of output until end-2014. Fitch projects GDP growth of around 2% per year for 2016-17, supported by household consumption benefitting from a decline in unemployment and a pickup in tourism and investment. [source ¬ recent Fitch Ratings article]
CYPRUS EXIT EU-IMF PROGRAM ¬ ECONOMY STABLE ¬ CREDIT RATING UPGRADES
Cyprus`s decision to exit its three-year EU-IMF program ahead of schedulewithout a precautionary post-program credit line reflects the sovereign`s comfortable cash position and strong debt management which limit refinancing risks, according to Fitch Ratings.
A press release issued by the agency notes that the government concluded the macroeconomic adjustment program on 7 March, two months ahead of the scheduled IMF, and a few weeks ahead of the EU expirations. Having completed the penultimate review in January, Cyprus used only EUR 7.3 billion of the total EUR 10 billion available to it since the program was mandated in 2013.
Credit ratings for Cyprus have all recently been upgraded due to positive outlook.
TOURISM IN CYPRUS INCREASING TO PRE-RECESSION LEVELS
Tourism in Cyprus: Cyprus saw record-breaking arrivals in 2015. Indications are that 2016 will build on this growth. There was an 8.9% increase overall in 2015, bringing total arrivals up to 2,659,405, according to the Cyprus Tourism Organisation (CTO).
This is the second best record following the 2001 landmark of 2.69 million. Cyprus attracted increasing numbers of visitors from Germany, Israel, Austria, France and the Netherlands as well as the Middle East, but most notably 2015 saw the total number of British tourists exceed the one-million mark for the first time since 2011, constituting a 20% rise.
Efforts by the government and the CTO to Œreinvest¹ in traditional tourist markets such as Britain and Germany has also helped reintroduce Cyprus to a new generation of tourists. The number of visitors from Greece and Germany rose 38% and 30% respectively in 2015 compared to 2014, while tourists from Sweden rose 1.8% and Israel 43%. SIGNIFICANT OIL AND GAS DISCOVERY OFF COAST OF CYPRUS Gas and Oil in Cyprus: The discovery of significant natural gas reserves in Block 12 of Cyprus and the nearby Tamar and Leviathan fields in Israel has indicated enormous petroleum and natural gas potentials in the region, deeming the circumstances for exploitation and production of oil and gas in Cyprus extremely positive and attracting great international interest from major energy providers.
Cyprus new oil and gas discovery can also bring in more oil and gas companies to tap into this lucrative market. Whilst world gas prices are rather low in certain countries like USA at around $2 Mbtu whilst Europe buys at $6-8 for Mbtu. CYPRUS GAS AND THE UK¹S BG GROUP The UK¹s oil and gas BG Group has recently acquired a significant stake in the Cyprus Gas Field.
Britain's BG Group BG.L agreed to pay U.S. firm Noble Energy (NBL.N) $165 million (£109 million) for a 35 percent stake in a consortium with rights over a natural gas field in Cyprus.