Morningstar DBRS: Cyprus GDP to grow by 2.4% in 2024

The Cypriot real GDP will expand by 2.4% this year, rating agency Morningstar DBRS has said revising marginally downwards its December 2023 projection of 2.5%.

However, in its new baseline macroeconomic projections, the Canadian rating agency upgraded significantly its projection for 2025, estimating that Cyprus output will reach 2.4% compared with its previous projection of 2%.

According to DBRS, unemployment in Cyprus will decline to 6.1% this year from 6.4% in its previous projection and will remain 6.1% in 2025 from 6.2% of its December projection.

On the global economy, DBRS said that expectations for US growth have improved markedly since its December Update with GDP growth projected at 2.1% for 2024, a sizeable forecast upgrade from the weak median projection of 0.6%, whereas “most other major economy forecasts have changed only modestly.”

“Europe is expected to remain mired in weak growth of less than 1% in 2024 with the exception of Spain and several other small euro area economies,” the agency added, noting that revisions to forecasts within Europe have been mixed, but slightly negative for the largest European economies in 2024 such as Germany, France and the U.K.

For 2025, excluding the US, which is expected to decelerate from above potential growth next year, most of the major economies are projected to see stronger growth in 2025, DBRS added noting however “we continue to see some downside risks, including escalating geopolitical tensions, electoral uncertainty, particularly with regard to the US, and mounting commercial real estate losses. Nonetheless, with inflation easing, most central banks have room to cut rates if adverse demand shocks materialise.”