Cyprus will be seeing a record economic growth in the year to come compared to 2015. Both the Government and the credit rating agency, Moody’s, have offered good perspectives for the Cypriot economy in 2016. For information related to the country’s current economic situation you can refer to our Cypriot lawyers.
The first round of good news comes from the Cypriot governmental officials who predicted a 1.8% economic growth for the next year. The statement is based on official economic forecasts. However, the increase could be slightly higher than this. In 2017 the economy is expected to grow an average 2-2.5%.
The President is also very confident about Cyprus’s economic increase which should lead to considerable lower unemployment rates. The growth is very likely to come from new banking regulations which provide for the creation of new tools that help non-performing loans. The first results of these new regulations are expected to render their first results in the first two or three months of 2016.
Moody’s also released a report in which Cyprus’ sovereign credit rating was upgraded. From B3 the country’s rating was raised at B1. The agency also provided a stable outlook for the Cypriot economy. According to Moody’s, Cyprus is recovering at a faster pace than predicted and will soon surpass all its fiscal targets.
The raise in Cyprus’ rating comes after the international creditors just finished to revise Cyprus’ adjustment program and after the new regulations for selling non-performant loans to third parties. Moody’s is also expecting for Cyprus’ exports to continue rising which will definitely help the economy to stabilize. Moreover, the credit rating agency forecasts an increase in domestic demand.
For the immediate future, Moody’s believes that the reformation of the administration system, privatization and financial sector will help the country to sustain a medium-term economic stability. The credit rating agency also believes that the export, the banking and the tourism sectors will most likely produce nice surprises as they have not reached their maximum peaks yet.
On a final note, Moody’s report predicted a 1.4% economic growth for 2016 which is not far from the Government’s expectations.
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