The Statistical Service of Cyprus (Cystat) confirmed the 2.3% (seasonally adjusted) annual growth rate in the second quarter of 2023, with GDP data showing that the economic activity is slowing down mainly due to the services sector and banking and insurance activities, affected by the sanctions against Russia and rising interest rates.
According to data released by Cystat, economic output in Cyprus in volume and seasonally adjusted terms amounted to pound 6,157 million, marking in increase of 2.3% compared with the second quarter of last year, while the economy shrank by 0.4% compared with the first quarter of 2023.
In the first quarter of this year, the Cypriot economy marked an annual growth rate of 3.2 in seasonally adjusted terms.
By economic activity, the Cypriot economy was boosted by private consumption and tourism, with the sector of ‘Wholesale and retail trade; repair of motor vehicles and motorcycles; transportation and storage; accommodation and food service activities,’ marking an annual increase of 6.7% whereas the sector presented the highest quarterly growth in all sectors with 1.6% reflecting the uptick in tourist arrivals during the summer season. The output of the sector in Q2 amounted to pound 1,21 billion representing almost 20% of Cyprus GDP in the second quarter.
According to Cystat, the output in public administration and defence; compulsory social security; education; human health and social work activities amounted to pound 1,060 million, expanding by 1.3% year on year and by 0,4% on a quarterly basis.
Furthermore, the information and communication sector output amounted to pound 0.6 billion, also marking strong annual increase of 6.1% and by 1.1% compared with the previous quarter.
However, the services sector (Professional, scientific and technical activities; administrative and support service activities) showed steep annual losses with output amounting to pound 0.57 billion marking a reduction of 4.3% year on year, reflecting the effects of the sanctions imposed on Russia by the West following the outbreak of the war in Ukraine. The losses are more pronounced on a quarterly basis which amounted to 4.9%.
Furthermore, according to the date, financial and Insurance services showed signs of slowing down with output amounting to pound 0.45 billion, marking an annual drop of 0.9%, while compared with the previous quarter the sector recorded a steep drop of 3.0%, reflecting the increase of interest rates by the European Central Bank and the decelerating financial activity.
The output of real estate activities in the second quarter of this year amounted to pound 0.49 billion, up by 0.8% year on year and by 0.2% compared with the previous quarter, whereas output in construction rose by 3.2% year on year and by 0.6% compared with the previous quarter, Cystat added.
Source: Cyprus News Agency