IMF outlook ‘vote of confidence’ for Cyprus
The International Monetary Fund’s revised outlook for Cyprus’ GDP growth for 2024 is “a vote of confidence” in the island, government spokesman Konstantinos Letymbiotis said on Tuesday.
He was commenting on the IMF’s October World Economic Outlook report, released on the same day.
Citing the IMF, Letymbiotis said Cyprus is projected to have the third fastest-growing economy in the eurozone this year.
In its October 2024 outlook, the IMF raised its forecast for Cyprus’ economic growth for this year from 2.7 per cent to 3.3 per cent.
For its part, the Cypriot finance ministry predicts a growth rate of 3.7 per cent in 2024.
According to the IMF, the inflation rate in Cyprus is projected at 2.2 per cent for 2024, and 2 per cent for 2025. Meanwhile the unemployment rate is set to decline, with forecasts of 5.3 per cent in 2024 and 5.1 per cent in 2025.
At the same time, the IMF revised its outlook for Cyprus’ current account deficit, now expected to be -10.1 per cent in 2024 and -8.6 per cent in 2025. These figures are less optimistic than earlier forecasts.
For the global economy, the IMF predicts steady but modest growth, remaining at 3.2 per cent for both 2024 and 2025.
Noting that the global economy is “in a sticky spot”, the IMF said “services inflation is holding up progress on disinflation, which is complicating monetary policy normalisation. Upside risks to inflation have thus increased, raising the prospect of higher for even longer interest rates, in the context of escalating trade tensions and increased policy uncertainty.”
For the eurozone, the IMF forecasts a growth rate of 0.8 per cent, and 1.7 per cent for the European Union. Growth in the United Kingdom will slow to a crawl at 1.1 per cent. Russia’s economy is expected to grow 3.6 per cent this year, but decline to 1.3 per cent in 2025.