IMF revises Cyprus' growth rate in 2023 to 2.2% from 2.5%

The International Monetary Fund (IMF), in October’s 'World Economic Outlook,' forecasts that Cyprus’ growth rate for 2023 will slow down to 2.2% of GDP, down from the 2.5% it had projected in its April outlook. For 2024, the IMF forecasts a growth rate of 2.7%, instead of 2.8%.

In addition, the IMF expects that growth rate for the fourth quarter of 2023 will be 1.8%, while inflation will fall to 3.5% in 2023, compared to 3.9% projected in April’s outlook. For 2024 inflation is projected to be at 2.4%, instead of 2.5%.

The unemployment rate in Cyprus is forecast to increase slightly to 6.7% for 2023, compared to 6.5% in the last projection, to increase to 6.4% in 2024, again revised upwards compared to the 6.2% of April’s outlook.

The Current Account deficit is expected to be at 8.6% for 2023, up from 7.8% in April, and the IMF forecasts that it will be 7.9% in 2024, compared to 7.2% it projected in April.

Regarding the eurozone, the IMF projects a growth rate of 0.7% for 2023 and 1.2% for 2024, while inflation is expected to drop to 5.6% in 2023 and 3.3% in 2024. The IMF projects the eurozone’s unemployment rate to stand at 6.6% in 2023 and at 6.5% in 2024.

In addition, the IMF forecasts global growth to slow from 3.5% in 2022 to 3% in 2023 and 2.9% in 2024, well below the historical (2000–19) average of 3.8%.

Advanced economies are expected to slow from 2.6% in 2022 to 1.5% in 2023 and 1.4% in 2024. On the other hand, emerging markets and developing economies are projected to have a modest decline in growth from 4.1% in 2022 to 4% in both 2023 and 2024.

Global inflation is forecast to decline steadily, from 8.7% in 2022 to 6.9% in 2023 and 5.8% in 2024. Core inflation is generally projected to decline more gradually, and inflation is not expected to return to the target until 2025 in most cases.

(Source: CNA)