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Cyprus Economy 1999

    Economy—overview: Economic affairs are dominated by the division of the country into the southern (Greek) area controlled by the Cyprus Government and the northern Turkish Cypriot-administered area. The Greek Cypriot economy is prosperous but highly susceptible to external shocks. Erratic growth rates in the 1990s reflect the economy's vulnerability to swings in tourist arrivals, caused by political instability on the island and fluctuations in economic conditions in Western Europe. Economic policy in the south is focused on meeting the criteria for admission to the EU. As in the Turkish sector, water shortage is a growing problem, and several desalination plants are planned. The Turkish Cypriot economy has about one-fifth the population and one-third the per capita GDP of the south. Because it is recognized only by Turkey, it has had much difficulty arranging foreign financing, and foreign firms have hesitated to invest there. The economy remains heavily dependent on agriculture and government service, which together employ about half of the work force. Moreover, the small, vulnerable economy has suffered because the Turkish lira is legal tender. To compensate for the economy's weakness, Turkey provides direct and indirect aid to nearly every sector, e.g. tourism, education, and industry.

    GDP: purchasing power parity—$10 billion (1997 est.)

    GDP—real growth rate: 2.3% (1997 est.)

    GDP—per capita: purchasing power parity—$13,000 (1997 est.)

    GDP—composition by sector: Greek Cypriot area: agriculture 4.4%; industry 22.4%; services 73.2% (1996); Turkish Cypriot area: agriculture 10%; industry 24.6%; services 65.4% (1995)

    Population below poverty line: NA%

    Household income or consumption by percentage share:
    lowest 10%: NA%
    highest 10%: NA%

    Inflation rate (consumer prices): Greek Cypriot area: 2.3% (1998 est.); Turkish Cypriot area: 87.5% (1997 est.)

    Labor force: Greek Cypriot area: 299,700; Turkish Cypriot area: 76,500 (1996)

    Labor force—by occupation: Greek Cypriot area: services 62%, industry 25%, agriculture 13% (1995); Turkish Cypriot area: services 66%, industry 11%, agriculture 23% (1995)

    Unemployment rate: Greek Cypriot area: 3.3% (1998 est.); Turkish Cypriot area: 6.4% (1996)

    revenues: Greek Cypriot area—$2.9 billion, Turkish Cypriot area—$171 million
    expenditures: Greek Cypriot area—$3.4 billion, including capital expenditures of $345 million, Turkish Cypriot area—$306 million, including capital expenditures of $56.8 million (1997 est.)

    Industries: food, beverages, textiles, chemicals, metal products, tourism, wood products

    Industrial production growth rate: Greek Cypriot area: -4% (1996); Turkish Cypriot area: 5.1% (1995)

    Electricity—production: 2.2 billion kWh (1996)

    Electricity—production by source:
    fossil fuel: 100%
    hydro: 0%
    nuclear: 0%
    other: 0% (1996)

    Electricity—consumption: 2.2 billion kWh (1996)

    Electricity—exports: 0 kWh (1996)

    Electricity—imports: 0 kWh (1996)

    Agriculture—products: potatoes, citrus, vegetables, barley, grapes, olives, vegetables

    Exports: Greek Cypriot area: $1.2 billion (f.o.b., 1998 est.); Turkish Cypriot area: $70.5 million (f.o.b., 1996)

    Exports—commodities: Greek Cypriot area: citrus, potatoes, grapes, wine, cement, clothing and shoes (1996); Turkish Cypriot area: citrus, potatoes, textiles (1996)

    Exports—partners: Greek Cypriot area: Russia 19.1%, Bulgaria 16.4%, UK 11.3%, Greece 6.3%, Germany 4.8%; Turkish Cypriot area: Turkey 48.2%, UK 21.3%, other EU 13.7% (1997)

    Imports: Greek Cypriot area: $3.8 billion (f.o.b., 1998 est.); Turkish Cypriot area: $318.4 million (f.o.b., 1996)

    Imports—commodities: Greek Cypriot area: consumer goods, petroleum and lubricants, food and feed grains, machinery (1996); Turkish Cypriot area: food, minerals, chemicals, machinery (1996)

    Imports—partners: Greek Cypriot area: US 17.8%, UK 11.9%, Italy 9.7%, Germany 7.5%, Greece 7.6% (1997); Turkish Cypriot area: Turkey 55.3%, UK 13.8%, other EU 11.6% (1997)

    Debt—external: Greek Cypriot area: $1.56 billion (1997)

    Economic aid—recipient: Greek Cypriot area—$187 million in grants (1990-94); Turkish Cypriot area— $700 million from Turkey in grants and loans (1990-97) that are usually forgiven

    Currency: Greek Cypriot area: 1 Cypriot pound (°C) = 100 cents; Turkish Cypriot area: 1 Turkish lira (TL) = 100 kurus

    Exchange rates: Cypriot pounds per US1$—0.5013 (January 1999), 0.5170 (1998), 0.5135 (1997), 0.4663 (1996), 0.4522 (1995), 0.4915 (1994); Turkish liras (TL) per US$1—331,400 (January 1999), 260,724 (1998), 151,865 (1997), 81,405 (1996), 45,845.1 (1995), 29,608.7 (1994)

    Fiscal year: calendar year

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Revised 1-Mar-99
Copyright © 1999 Photius Coutsoukis (all rights reserved)