DBRS Morningstar revises Cyprus’ economic growth for 2023 to 2.5% from 2.1%

In an upward revision of the Cyprus economic growth for 2023, DBRS Morningstar rating agency has raised its forecast to 2.5%, up from the 2.1% expected back in June. Simultaneously, the Canadian agency maintains its estimate of 2.4% growth for 2024.

In its September report, which outlines its macroeconomic scenario, DBRS revised its estimates for 2023 growth, as well as for several other European countries, including Greece, France, Spain, Portugal, Slovakia, Slovenia, Denmark, Finland, Latvia, Lithuania, and Malta. However, the agency downgraded its outlook for the German economy, now anticipating a deeper recession in 2023, with a contraction of 0.3% compared to the previously expected 0.1% decline.

The agency expects that central banks in North America and Europe will maintain higher interest rates for a significant portion of 2024, with the possibility of interest rates beginning to decrease again in late 2024 or early 2025.

It also says that its forecasts for most major economies have been revised slightly upward in the past quarter.

It points out that the United States is now expected to grow at around 2% in 2023, slightly above most estimates for potential growth, while Canada is expected to achieve 1.4% growth.

Furthermore, it anticipates Japan to grow by 1.8%, and it notes that the revisions of growth forecasts for Europe are mixed.

According to the agency, its forecasts for growth in France and the United Kingdom have been revised slightly upward, although they continue to exhibit weak growth rates at 0.7% and 0.4%, respectively.

According to DBRS, as the conflict in Ukraine continues, additional disruptions in energy or food prices "appear possible."

Similarly, it adds that disruptions in grain production and exports could reoccur.

It also notes that US and EU relations with China are tense, with the potential to create additional disruptions in the supply chain or shocks to global demand.

(Source: CNA)