Cyprus Economy Update - Q4 2017

Cyprus Economy Update - Q4 2017

This alert covers updates regarding Cyprus’ economy, the GDP growth rate, the increase in tourist arrivals and revenue, the new Barbados Double tax treaty, the EEZ updates, the statistics in house prices and construction, property sales, unemployment, inflation, company registrations, restructured loans, registrations of motor vehicles as well as foreign and retail trade.


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KPMG in Cyprus


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GDP Growth Rate, 4th Quarter 2017

According to the Statistical Service, the GDP growth rate in real terms during the fourth quarter of 2017 is positive and is estimated at +4.0% over the corresponding quarter of 2016. Based on seasonally and working day
adjusted data, GDP growth rate in real terms is estimated at +3.9% (Source: CYSTAT).

EEZ Gas Update

Italian oil & gas company ENI has announced a “promising” gas discovery in Cyprus’ Block 6, noting that the discovery confirms the extension of the “Zohr like” play in Cyprus’ Exclusive Economic Zone (EEZ).

An intensive and detailed data collection (fluids and rock samples) has been executed on the well. Calypso 1 is a promising gas discovery. Additional studies will be carried out to assess the range of the gas volumes in place and define further exploration and appraisal operations.

ENI is the Operator of Block 6 with 50% of participation interest while Total is partner with the remaining 50%. ENI has been present in Cyprus since 2013 and detains interests in six licenses located in the EEZ of Cyprus (in Blocks 2, 3, 6, 8, 9 and 11), five of which are operated (Source:



On the basis of the results of the Passengers Survey, arrivals of tourists reached 75.867 in January 2018 compared to 62.611 in January 2017, recording an increase of 21,2%. January 2018 had the highest volume of tourist arrivals ever recorded in Cyprus during the specific month.

On the basis of the results of the Passengers Survey, revenue from tourism reached €89,5 million in November 2017 compared to €83,8 million in the corresponding month of the previous year, recording an increase of 6,8%. 

For the period of January – November 2017 revenue from tourism is estimated at €2.583,3 million compared to €2.312,5 million in the corresponding period of 2016, recording an increase of 11,7% (Source: CYSTAT).

RICS Property Prices

An increase of 7.4% in apartment prices and 4.2% in house prices on an annual basis was recorded by RICS’ Cyprus Property Price Index. Across Cyprus, on an annual basis (compared to Q3 2016), the price of flats increased by 7.4%, houses by 4.2%, offices by 8.8%, warehouses by 4.4% and retail by 4.5%.

The Property Price Index has recorded increases on an annual basis in all cities and asset classes, with significant increases being recorded in all districts, with Paralimni, on the east, and Paphos, on the west, showing slightly smaller annual increases.  

The highest increase was in the southern coastal town of Limassol with 13.2% and 14.3% respectively. For offices the highest increase was in Nicosia with 19.5% and for warehouses and retail the highest increase was again Nicosia with both 7%.

On a quarterly basis residential prices for both houses and flats increased on a quarterly basis by 1.7% and 0.5% respectively, with the biggest increase being in Limassol with a quarterly increase of 4.1% for flats and 5.5% houses.

The value of holiday homes on a quarterly basis across Cyprus increased by 2.50% for flats and 1.80% for houses. Limassol showed the highest quarterly increases for holiday apartments with an increase of 4% and Paralimni for holiday homes with an increase of 2.9%.

Across Cyprus, on a quarterly basis rental values increased by 4.6% for apartments, 2.5% for houses, 1.5% for retail, 5.7% for offices and 0.9% for warehouses. Compared to Q3 2016, rents increased annually by 12.5% for flats, 9.2% for houses, 6.1% for retail, 22.4% for offices and1.6%  for warehouses (Source:

Building Permits

An increase of 52.6% was recorded in the total amount of building permits in the period January - November 2017, while the total area of the permits issued increased by 45.1%.

According to figures released by the Cyprus Statistical Service, the number of residential units increased by 41.9%. During the period January - November 2017, a total of 5,291 building permits were issued compared to 4,900 in the corresponding period of the previous year.

The number of building permits authorized by the municipal authorities and the district administration offices during November 2017 stood at 474. The total value of these permits reached €308.7 million and the total area of 225.7 thousand square metres. These building permits provide for the construction of 658 dwelling units.

In the corresponding month of 2016 the number of building permits was 550. The total value of these permits reached €113.49 million and the total area of 100.3 thousand square meters. These building permits provide for the construction of 341 dwelling units (Source:

Property Sale Contracts

According to the data published by the Cyprus Department of Lands and Surveys, in 2017 the total number of sale contracts reached 8.734, recording an increase of 24% in compared to 2016. In January 2018 the total number of sale contracts was 695 compared to 423 in January 2017, recording an increase of 64%. (Source:

Company Registrations

According to data from the Registrar of Companies and Official Receiver, during the year 2017, applications for company registrations have reached 13.672 showing an increase of 0,2% from 13.645 in the year 2016. In January 2018, the new registrations were 1.000. The total number of companies as of January 2018 was 218.597 (Source:

Harmonized Index of Consumer Prices

The Harmonized Price Index for January 2018 decreased by 1,5% when compared to January 2017, while compared to December 2017 decreased by 1,9% (Source: CYSTAT).


The unemployed persons, registered at the District Labor Offices on the last day of January 2018, reached 35.989 persons. Based on the seasonally adjusted data that show the trend of unemployment, the number of registered unemployed for January 2018 decreased to 29.812 persons in comparison to 30.591 in the previous month (Source: CYSTAT).

Foreign Trade

On the basis of preliminary estimates for Foreign Trade of Cyprus in December 2017, total imports were €698,8 million, of which €428,1 million were imports from other Member States of the EU and €270,7 million imports from Third Countries. Total exports were €227,4 million of which €77,3 million were exports to other Member States of EU and €150,1 million exports to Third Countries (Source: CYSTAT).

Retail Trade

In November 2017, retail trade volume increased in Cyprus by 0.5% in monthly and by 7.0% in annual basis, according to estimates from Eurostat.

In December 2017 compared to November 2017, the seasonally adjusted volume of retail trade decreased by 1.1% in the euro area (EA19) and by 1.0% in the EU28. In November, the retail trade volume rose by 2.0% in the euro area and by 2.1% in the EU28. In December 2017 compared to December 2016, the calendar adjusted retail sales index increased by 1.9% in the euro area and by 2.4% in the EU28. The average retail trade for the  year 2017, compared to 2016, rose by 2.6% in both the euro area and EU28 (Source:

Registration of Saloon Cars

January 2018 was the best January in terms of passenger saloon cars registrations since 2008, according to the respective data released by the Statistical Service of Cyprus. In addition, January 2018 was the second-best month in saloon registrations since July 2009, as reported by the Cyprus News Agency.

The registrations of passenger saloon cars increased by 20.9% to 3.481, from 2.880 in January 2017. Of these, 1,222 were new and 2,259 used. In January 2018, total registrations of motor vehicles increased by 20.1% to 4,123, from 3,434 in January 2017 (Source:

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