Τhe International Monetary Fund (IMF), upgraded Tuesday significantly its projection for Cyprus` economic growth in its World Economic Outlook (WEO) for October 2016.
According to IMF, Cyprus GDP is expected to grow by 2.8% by the end of 2016 compared to 1.6% projected in the April WEO, while in 2017 the GDP is expected to increase by 2.2% compared with 2% projected in April 2016. At the same time the IMF maintained its forecast that the growth of Cyprus` economy by 2021 should not exceed 2%.
According to IMF consumer prices will continue in 2016 to be negative reaching -1.0% while in 2017 will grow to 0.5%. Inflation, according to forecasts will reach 1.9% by the end of 2021.
Unemployment, according to IMF estimates, will reach 13% in 2016 to decline to 11.6% in 2017.
Also, the deficit in the current account, will fall to 0.9% of GDP in 2016 from 3.6% in 2015 and will grow to 3.7% of GDP in 2017, to reach 4.3% in 2021.
At the same time the IMF upgraded slightly its forecasts for growth in the eurozone in 2016, saying that the block`s economy will grow by 1.7% compared to 1.5% projected in April 2016. At the same time it downgraded forecasts for 2017 to 1.5% from 1.6%. Inflation in the euro area is projected to remain at the low levels of 0.3% in 2016 to accelerate in 2017 to 1.1%.
Global growth is projected to slow to 3.1% in 2016 before recovering to 3.4% in 2017.
The forecast, revised down by 0.1 percentage point for 2016 and 2017 relative to April, reflects a more subdued outlook for advanced economies following the June U.K. vote in favor of leaving the European Union (Brexit) and weaker-than-expected growth in the United States.
As reported, although the market reaction to the Brexit shock was reassuringly orderly, the ultimate impact remains very unclear, as the fate of institutional and trade arrangements between the United Kingdom and the European Union is uncertain.