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30 Mar 2023
Cyprus: Staff Concluding Statement of the 2023 Article IV Mission
1. Cyprus’s economy has proved resilient to the fallout from Russia’s invasion of Ukraine, but surging energy prices pushed up inflation. Output grew by 5.6 percent in 2022 as consumption recovered on the back of post-COVID pent-up demand, tourist arrivals rebounded (despite the impact of the war on arrivals from Russia and Ukraine), and the ICT sector continued expanding supported by an influx of new companies. Employment has recovered to pre-COVID levels and unemployment has dropped to a post-financial-crisis low. However, high energy prices contributed to a pickup of inflation, transmitting to other prices amid the tight labor market.
