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Cyprus Economy
Economy - overview:
The Greek Cypriot economy is prosperous but highly susceptible to external shocks. Erratic growth rates over the past decade reflect the economy's vulnerability to swings in tourist arrivals, caused by political instability in the region and fluctuations in economic conditions in Western Europe. Economic policy is focused on meeting the criteria for admission to the EU. EU-driven tax reforms in 2003 have introduced fiscal imbalances, which, coupled with a sluggish tourism sector, have resulted in growing fiscal deficits. 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. Because it is recognized only by Turkey, it has had much difficulty arranging foreign financing and investment. It remains heavily dependent on agriculture and government service, which together employ about half of the work force. To compensate for the economy's weakness, Turkey provides grants and loans to support economic development. Ankara provided $200 million in 2002 and pledged $450 million for the 2003-05 period. Future events throughout the island will be highly influenced by the outcome of negotiations on the UN-sponsored agreement to unite the Greek and Turkish areas.
GDP:
Greek Cypriot area: purchasing power parity - $14.82 billion (2003 est.); Turkish Cypriot area: purchasing power parity - $1.217 billion (2003 est.)
GDP - real growth rate:
Greek Cypriot area: 1.9% (2003 est.); Turkish Cypriot area: 2.6% (2003 est.)
GDP - per capita:
Greek Cypriot area: purchasing power parity - $19,200 (2003 est.); Turkish Cypriot area: purchasing power parity - $5,600 (2003 est.)
GDP - composition by sector:
Greek Cypriot area: agriculture 4.1%; industry 19.9%; services 20.3%
Turkish Cypriot area: agriculture 75.6%; industry 20.5%; services 68.9% (2003)
Investment (gross fixed):
19.9% of GDP (2003)
Population below poverty line:
NA
Household income or consumption by percentage share:
lowest 10%: NA
highest 10%: NA
Inflation rate (consumer prices):
Greek Cypriot area: 4.1% (2003 est.); Turkish Cypriot area: 12.6% (2003 est.)
Labor force:
330,000 Greek Cypriot area: 306,000; Turkish Cypriot area: 95,025 (2003)
Labor force - by occupation:
Greek Cypriot area: services 75.6%, industry 19.4%, agriculture 4.9% (2003); Turkish Cypriot area: services 68.9%, industry 20.5%, agriculture 10.6% (2003)
Unemployment rate:
Greek Cypriot area: 3.4%; Turkish Cypriot area: 5.6% (2003 est.)
Budget:
revenues: Greek Cypriot area - $3.971 billion, Turkish Cypriot area - $231.3 million (2002 est.)
expenditures: $4.746 billion, Greek Cypriot area - $539 million, including capital expenditures of $539 million, Turkish Cypriot area - $432.8 million, including capital expenditures of NA (2003)
Public debt:
62.3% of GDP (2003)
Industries:
food, beverages, textiles, chemicals, metal products, tourism, wood products
Industrial production growth rate:
Greek Cypriot area: -0.6% (2002); Turkish Cypriot area: -0.3% (2003)
Electricity - production:
3.401 billion kWh; Turkish Cypriot area: NA kWh (2001)
Electricity - production by source:
fossil fuel: 100%
other: 0% (2001)
hydro: 0%
nuclear: 0%
Electricity - consumption:
Greek Cypriot area: 3.163 billion kWh; Turkish Cypriot area: NA kWh (2001)
Electricity - exports:
0 kWh (2001)
Electricity - imports:
0 kWh (2001)
Oil - production:
0 bbl/day (2001 est.)
Oil - consumption:
49,000 bbl/day (2001 est.)
Oil - exports:
NA (2001)
Oil - imports:
NA (2001)
Agriculture - products:
potatoes, citrus, vegetables, barley, grapes, olives, vegetables, poultry, pork, lamb, kids, dairy
Current account balance:
$-545 million (2003)
Exports:
Greek Cypriot area: $1.054 billion f.o.b. Turkish Cypriot area: $46 million f.o.b. (2003 est.)
Exports - commodities:
Greek Cypriot area: citrus, potatoes, pharmaceuticals, cement, clothing and cigarettes; Turkish Cypriot area: citrus, potatoes, textiles
Exports - partners:
UK 24.4%, France 11%, Germany 7.2%, Greece 6.4% (2003 est.)
Imports:
Greek Cypriot area: $4.637 billion f.o.b.; Turkish Cypriot area: $301 million f.o.b. (2003 est.)
Imports - commodities:
Greek Cypriot area: consumer goods, petroleum and lubricants, intermediate goods, machinery, transport equipment; Turkish Cypriot area: food, minerals, chemicals, machinery
Imports - partners:
Russia 36.3%, Greece 6.5%, UK 5.3%, Germany 5.2%, Italy 5.1%, France 4.8% (2003 est.)
Reserves of foreign exchange & gold:
$3.453 billion (2003)
Debt - external:
Greek Cypriot area: $8.85 billion; Turkish Cypriot area: NA (2003)
Economic aid - recipient:
Greek Cypriot area - $17 million (1998); Turkish Cypriot area - $700 million from Turkey in grants and loans (1990-97), which are usually forgiven (1998)
Currency:
Greek Cypriot area: Cypriot pound (CYP); Turkish Cypriot area: Turkish lira (TRL)
Currency code:
CYP; TRL
Exchange rates:
Cypriot pounds per US dollar - 0.5174 (2003), 0.6107 (2002), 0.6431 (2001), 0.6224 (2000), 0.5429 (1999), Turkish lira per US dollar 1.505 million (2003), 1.507 million (2002), 1,225,590 (2001), 625,218 (2000), 418,783 (1999)
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