Economy - overview:
The Greek Cypriot economy is prosperous but highly susceptible to external shocks. The service sector, mainly tourism and financial services, dominates the economy; erratic growth rates over the past decade reflect the economy's reliance on tourism, which often fluctuates with political instability in the region and economic conditions in Western Europe. Economic policy is focused on meeting the criteria to join the European Exchange Rate Mechanism (ERM2) within the next two years although sluggish tourism and poor fiscal management have resulted in growing budget deficits since 2001. As in the Turkish sector, water shortages are a perennial problem; a few desalination plants are now on-line. After 10 years of drought, the country received substantial rainfall from 2001-03, alleviating immediate concerns. The Turkish Cypriot economy has roughly one-third of the per capita GDP of the south, and economic growth tends to be volatile, given north Cyprus's relative isolation, bloated public sector, reliance on the Turkish lira, and small market size. The Turkish Cypriot economy grew 2.6% in 2004, fueled by growth in the construction and education sectors as well as increased employment of Turkish Cypriots in the Republic of Cyprus. The Turkish Cypriots are heavily dependent on transfers from the Turkish government. Ankara provides around $300 million a year directly into the "TRNC" budget and regularly provides additional financing for large infrastructure projects. Agriculture and government service, together employ almost half of the work force, and the potential for tourism is promising, especially with the easing of border restrictions with the Greek Cypriots in April 2003.
GDP:
Republic of Cyprus: purchasing power parity - $15.71 billion north Cyprus: purchasing power parity - $4.54 billion (2004 est.)
GDP - real growth rate:
Republic of Cyprus: 3.2% north Cyprus: 2.6% (2004 est.)
GDP - per capita:
Republic of Cyprus: purchasing power parity - $20,300 (2004 est.); north Cyprus: purchasing power parity - $7,135 (2004 est.)
GDP - composition by sector:
Republic of Cyprus: agriculture 4.1%; industry 19.9%; services 76%
north Cyprus: agriculture 10.6%; industry 20.5%; services 68.9% (2004)
Labor force:
Republic of Cyprus: 330,000, north Cyprus: 95,025 (2004 est.)
Labor force - by occupation:
Republic of Cyprus: agriculture 4.9%, industry 19.4%, services 75.6%
north Cyprus: agriculture 15.1%, industry 27%, services 57.9% (2003 est.)
Unemployment rate:
Republic of Cyprus: 3.2%; north Cyprus: 5.6% (2004 est.)
Population below poverty line:
NA%
Household income or consumption by percentage share:
lowest 10%: NA%
highest 10%: NA%
Inflation rate (consumer prices):
Republic of Cyprus: 2.4% (2003 est.); north Cyprus: 12.6% (2003 est.)
Investment (gross fixed):
Republic of Cyprus: 17.9% of GDP (2004 est.)
Budget:
revenues: Republic of Cyprus - $5.616 billion (2004 est.), north Cyprus - $404.3 million (2003 est.)
expenditures: Republic of Cyprus - $685.7 million, including capital expenditures of $685.7 million, north Cyprus - $775.7 million, including capital expenditures of $91.4 million (2004 est.)
Public debt:
Republic of Cyprus: 74.9% of GDP (2004 est.)
Agriculture - products:
citrus, vegetables, barley, grapes, olives, vegetables, poultry, pork, lamb, kids, dairy, cheese
Industries:
tourism, food and beverage processing; cement and gypsum production; ship repair and refurbishment; textiles; light chemicals; metal products; wood, paper, stone, and clay products
Industrial production growth rate:
Republic of Cyprus: 0.4% (2002); north Cyprus: -0.3% (2002)
Electricity - production:
4 billion kWh; north Cyprus: NA kWh (2003)
Electricity - consumption:
Republic of Cyprus: 3.663 billion kWh (2003); north Cyprus: 602 million kWh (2003)
Electricity - exports:
0 kWh (2002)
Electricity - imports:
0 kWh (2002)
Oil - production:
300 bbl/day (2004 est.)
Oil - consumption:
Republic of Cyprus: 49,000 bbl/day (2001 est.)
Oil - exports:
NA
Oil - imports:
NA
Current account balance:
$-619.9 million (2004 est.)
Exports:
Republic of Cyprus: $1.094 billion f.o.b. north Cyprus: $49.3 million f.o.b. (2004 est.)
Exports - commodities:
Republic of Cyprus: citrus, potatoes, pharmaceuticals, cement, clothing and cigarettes; north Cyprus: citrus, potatoes, textiles
Exports - partners:
UK 20.2%, Greece 13.1%, Israel 7.4%, Germany 7%, Belgium 4.6% (2004)
Imports:
Republic of Cyprus: $5.258 billion f.o.b. north Cyprus: $415.2 million f.o.b. (2004 est.)
Imports - commodities:
Republic of Cyprus: consumer goods, petroleum and lubricants, intermediate goods, machinery, transport equipment; north Cyprus: vehicles, fuel, cigarettes, food, minerals, chemicals, machinery
Imports - partners:
Russia 30.2%, Italy 8%, Greece 7.5%, Germany 6.4%, UK 6.1%, Japan 5.8%, France 4.2% (2004)
Reserves of foreign exchange and gold:
Republic of Cyprus: $3.385 billion
north Cyprus: $941.6 million (2004 est.)
Debt - external:
Republic of Cyprus: $7.327 billion; north Cyprus: $NA (2004 est.)
Economic aid - recipient:
Republic of Cyprus - $17 million (1998); north Cyprus - $700 million from Turkey in grants and loans, which are usually forgiven (2003)
Currency (code):
Greek Cypriot area: Cypriot pound (CYP); Turkish Cypriot area: Turkish lira (TRL)
Exchange rates:
Cypriot pounds per US dollar - 0.4686 (2004), 0.5174 (2003), 0.6107 (2002), 0.6431 (2001), 0.6224 (2000), Turkish lira per US dollar 1.426 million (2004), 1.501 million (2003), 1.507 million (2002), 1.226 million (2001), 625,200 (2000)
Fiscal year:
calendar year
