In 2013, Cyprus experienced a severe economic crisis caused by both the exposure of Cypriot banks on local companies and Greek government debt. The effects of the crisis were also noticeable in 2015, when Cyprus’s GDP fell to 1.98%. However, a steady upward trend was observed over two years, reaching 3.86% in the beginning of 2017. CPM Trading has published a new report on the state of Cyprus’s economic recover and how it can be used as an example to others.
What was the basis of Cypriot economic recovery strategy?
The capital level in the banking system was restored as quickly as possible and was substantially improved, which also facilitated the return of foreign investment.
A more active work also began with the state image cultivation, understanding its direct relation to economic prosperity.
Another cornerstone of economic recovery was and is the education sector. In Cyprus, there is a huge proportion of people in higher education, and the strategic direction of exports in the post-crisis economy is also the provision of higher education for the people of other countries. The number of high-educated people in Cyprus can be greatly used to develop some of the narrow sectors that use such people’s capital. Cyprus is aware that it has no opportunity for large factories or assembly lines and that it cannot compete with large factories in China, India and other countries, but can use high-value human capital.
The success of Cyprus is also unthinkable without the logistics industry – it is well connected to the rest of the world through air and sea connections, with two international airports, Larnaca and Paphos, serving more than 75 international airlines. A wide network of airline links Cyprus with continental Europe, Africa, the Middle East and Asia. This island has been established as an international transit station for commercial air transport with excellent connections to the entire region. Cyprus is also one of the world’s leading marine environmental centre. Every year, thousands of ships call at Cypriot ports, served by about 70 shipping lines. The national road network is well maintained and well thought out.
Future forecasts are cautiously optimistic – GDP is projected at 3.57% this year and 2.95% in 2019. If we compare countries that have not succeeded enough to recover from the crisis and Cyprus, education, logistics and the image of the state clearly stand out.