Detailed Review of Cyprus’s Economy
Having joined the European Union in 2004 Cyprus has benefited from numerous aid packages for development, especially during the financial crisis of 2008 and the recent economic collapse when the European Investment Bank supported the country’s economy. For 2014 the Cypriot economy is expect to contract by a further 4.8%.
Like most western countries, the main dynamic sector in Cyprus is the tertiary sector, which employs 70% of the population. Formerly very agricultural, the country has changed in order to thrive and maritime transport is today one of the flagship areas of its economy (6th largest civil fleet in the world).
Tourism is, of course, another important facet of Cyprus’s resourcefulness. Industry still has a significant place in the national economy (textiles, oil, paper, metallurgy, etc.) but it is fading rapidly, due to labour becoming too expensive.
From an international trade perspective, Cyprus’s largest customer is, of course, Europe (especially Greece, France and the United Kingdom) with which the country has 50% of its transactions. The region generates a lot of traffic, due to large imports, but has high-quality infrastructure that is able to cope with this.
Cyprus’s Economic Strengths
- Cyprus is a member of the European Union.
- Taxes on business are low compared to neighbouring countries.
- The country can trade easily with Europe, Asia and the Middle East.
- High-quality infrastructure and telecommunications.
- Economy supported by European and international aid.
Cyprus’s Economic Weaknesses
- Recent economic difficulties.
- The internal market is not extensive (not many inhabitants).
- A very special political climate (three regions controlled by different entities).