IMF Staff Country Reports

Cyprus: 2018 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Cyprus

Publication Date:

December 3, 2018

Electronic Access:

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Summary:

Cyprus is recovering strongly from the 2012–13 crisis. GDP growth is projected to remain above 4 percent in 2018–19, buoyed by services and foreign-financed construction. Unemployment is rapidly declining while large fiscal primary surpluses are putting public debt back on a declining path. Nevertheless, crisis legacies continue to weigh on the banking system. In early 2018, difficulties in the Cyprus Cooperative Bank led the authorities to intervene, albeit at a significant fiscal cost. In the process, a package of legislative measures strengthening the insolvency and foreclosure regime was also approved, which is now catalyzing the cleanup of bank balance sheets. These developments have led to a sovereign ratings upgrade, restoring Cyprus’s investment grade status.

Series:

Country Report No. 2018/337

Subject:

Banking Credit Financial institutions Fiscal policy Fiscal stance Loans Money Nonperforming loans Public debt