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Cyprus Economy update

Cyprus Economy update

This alert covers updates regarding Cyprus’ GDP growth rate, the increase in tourist arrivals and revenue, company registrations, the increase in house prices and real estate contracts, unemployment, inflation, and retail trade.

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GDP growth 3,3% in 1Q17

Τhe GDP growth rate in real terms during the first quarter of 2017 is positive and estimated at +3,4% over the corresponding quarter of 2016. Based on seasonally and working day adjusted data, GDP growth rate in real terms is estimated at +3,3%.

The increase of the GDP growth rate is mainly attributed to the sectors: "Hotels and Restaurants", "Professional, Scientific and Technical Activities", "Retail and Wholesale Trade", "Manufacturing", and "Construction". Negative growth rate was recorded by the sector "Financial Service Activities". (Source: CYSTAT).

Tourist arrivals and revenue

On the basis of the results of the Passengers Survey, arrivals of tourists reached 286.331 in April 2017 compared to 225.575 in April 2016, recording an increase of 26,9%. April 2017 had the highest volume of tourist arrivals ever recorded in Cyprus during the specific month.

For the period of January – April 2017 arrivals of tourists totaled 572.024 compared to 477.183 in the corresponding period of 2016, recording an increase of 19,9% and outnumbering the total arrivals ever recorded in Cyprus during the first four months of the year.

Revenue from tourism reached €86,1 million in March 2017 compared to €80,9 million in the corresponding month of the previous year, recording an increase of 6,4%. For the period of January – March 2017 revenue from tourism is estimated at €168,1 million compared to €147,6 million in the corresponding period of 2016, recording an increase of 13,9% Source: (CYSTAT).

Company registrations

According to data from the Registrar of Companies and Official Receiver, during the first five months of 2017, applications for company registrations have increased by 2,6% to 5.454 compared to 5.314 in the first five months of 2016. In 2016, applications for company registrations had increased by 20,5% reaching 13.541 compared to 11.234 in 2015. Thetotal number of registered companies is 208.493. (Source: Registrar of Companies and Official Receiver).

House prices

Property prices in Cyprus recorded a significant increase in the last quarter of 2016, according to RICS Cyprus. The Property Price Index has recorded increases in almost all cities and asset classes, with significant increases being recorded in Larnaca, Limassol and Nicosia, whilst other cities are progressively bottoming out, RICS said in a new publication on Wednesday.

The figures showed that across Cyprus, residential prices for both houses and flats increased on a quarterly basis by 1,7% and 0,7% respectively, with the biggest increase being in Larnaca, 3,3% for flats and Limassol 1,8% for houses. Values for holiday homes on a quarterly basis increased by 2,3% for flats and 2,2% for houses.

Across Cyprus, on a quarterly basis rental values increased by 1,8% for apartments, 2,9% for houses, 0,8% for retail, 4,3% for offices while for warehouses they remained stable. Compared to Q4 2015, rents increased by 6,6% for flats, 8,7% for houses, 4,9% for retail, 7,9% for offices and for warehouses 3,5%. All asset classes have shown a consecutive quarterly growth (Source: www.stockwatch.com.cy).

Building permits rise by 14%

Building permits in Cyprus rose by 14% in the first two months of 2017, reflecting the increased activity in the constructions sector.

Building permits authorized by the municipal authorities and the district administration offices in the period of January – February of 2017 reached 909 compared with 794 in the respective period of 2016.

The total value of this permits amounted to €182.5 million, marking an increase of 31% over the corresponding period of 2016, while total area increased by 27.5%. For February, authorized permits reached 444, with total value amounting to €92.4 million and the total area 94,1 thousand square meters. These building permits provide for the construction of 383 dwelling units (Source: www.stockwatch.com.cy).

Property sale contracts

According to Land Registry statistics, the number of sale contracts during May 2017 increased from 474 in April 2017 by 49% to 756. The total number of sale contracts in the period of January – May of 2017 reached 2.767 compared with 2.355 in the respective period of 2016 reflecting a 17% increase. (Source: www.moi.gov.cy).

Unemployment

The unemployed persons, registered at the District Labour Offices on the last day of May 2017, reached 29.922 persons. Based on the seasonally adjusted data that show the trendof unemployment, the number of registered unemployed for May 2017decreased to 34.281 persons in comparison to 34.903 in the previous month.

In comparison with May 2016, a decrease of 4.125 persons or 12,1% was recorded which was mainly observed in the sectors of public administration (a decrease of 1.299 unemployed persons), construction (a decrease of 1.238), trade (a decrease of 636), manufacturing (a decrease of 518) and transportation(a decrease of 190) (Source: CYSTAT).

Inflation

Inflation in Cyprus slowed down in May, data released by the Cyprus Statistical Service on Tuesday, show. The harmonised Consumer Prices Index was up by 0,9% on an annual basis compared to May 2016, while in comparison to the previous month it was up a mere 0,1%.In April the annual increase of harmonised inflation was 2,1%. For the period January - May 2017, inflation was recorded at 1,3% compared to the same period of the previous year (Source: www.stockwatch.com.cy).

Retail Trade

The turnover value and volume indices of retail trade presented an increase in March and in the first three months of the year. On the basis of provisional estimates, the Turnover Value Index of Retail Trade for March 2017 increased by 6,1% compared to the corresponding month of the previous year and reached 87,6 units (base 2010=100), Cystat announced.

It added that for the period January-March 2017 the index is estimated to have recorded an increase of 4,0% compared to the same period of 2016.

On the basis of provisional estimates, the Turnover Volume Index of Retail Trade for March 2017 increased by 2,7% compared to the corresponding month of the previous year and reached 88.1 units (base 2010=100). For the period January-March 2017, the index is estimated to have recorded an increase of 1,6% compared to the same period of 2016 (Source: www.stockwatch.com.cy).

Price Index of Construction Materials

The Price Index of Construction Materials for April 2017 reached 100,91 units (base year 2010=100,00), recording a decrease of 0,16% compared to March 2017.

For the period January - April 2017, the index recorded an increase of 0,76% compared to the same period of 2016 (Source: CYSTAT).

Industrial Output Prices Index

The Industrial Output Prices Index for April 2017 reached 100,9 units (base 2010=100), recording an increase of 0,2% compared to March 2017.

For the period January-April 2017, the index showed an increase of 3,8% compared to the corresponding period of the previous year. For Manufacturing, the index for April2017 reached 102,8 units, recording an increase of 0,1% compared to March 2017 (Source: CYSTAT).

Registration of Motor Vehicles

In January - May 2017 the total registrations of motor vehicles increased by 33,7% to 17.769, from 13.295 in the corresponding period of 2016.

The registrations of passenger saloon cars increased by 30,8% to 14.633, from 11.188 in January-May 2016 (Source: CYSTAT).

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