Internationally, Cyprus promotes its geographical location as a "bridge" between East and West, along with its educated English-speaking population, moderate local costs, good airline connections, and telecommunications. Since gaining independence from the United Kingdom in 1960, Cyprus has had a record of successful economic performance, reflected in strong growth, full employment conditions and relative stability.
Furthermore, Cyprus was dealt a severe blow by the Evangelos Florakis Naval Base explosion in July 2011, with the cost to the economy estimated at €1–3 billion, or up to 17% of GDP. The economic achievements of Cyprus during the preceding decades have been significant, bearing in mind the severe economic and social dislocation created by the Turkish invasion of 1974 and the continuing occupation of the northern part of the island by Turkey.
Cyprus became a full member of the World Tourism Organization when it was created in 1975.
After robust growth rates in the 1980s (average annual growth was 6.1%), economic performance in the 1990s was mixed: real GDP growth was 9.7% in 1992, 1.7% in 1993, 6.0% in 1994, 6.0% in 1995, 1.9% in 1996 and 2.3% in 1997.
After robust growth rates in the 1980s (average annual growth was 6.1%), economic performance in the 1990s was mixed: real GDP growth was 9.7% in 1992, 1.7% in 1993, 6.0% in 1994, 6.0% in 1995, 1.9% in 1996 and 2.3% in 1997.
In 1991, Cyprus introduced a value-added tax (VAT), which is at 19% as of 13 January 2014.
After robust growth rates in the 1980s (average annual growth was 6.1%), economic performance in the 1990s was mixed: real GDP growth was 9.7% in 1992, 1.7% in 1993, 6.0% in 1994, 6.0% in 1995, 1.9% in 1996 and 2.3% in 1997.
After robust growth rates in the 1980s (average annual growth was 6.1%), economic performance in the 1990s was mixed: real GDP growth was 9.7% in 1992, 1.7% in 1993, 6.0% in 1994, 6.0% in 1995, 1.9% in 1996 and 2.3% in 1997.
The decision resulted in a considerable decrease of Turkish Cypriot exports to the EU: from $36.4 million (or 66.7% of total Turkish Cypriot exports) in 1993 to $24.7 million in 1996 (or 35% of total exports) in 1996.
After robust growth rates in the 1980s (average annual growth was 6.1%), economic performance in the 1990s was mixed: real GDP growth was 9.7% in 1992, 1.7% in 1993, 6.0% in 1994, 6.0% in 1995, 1.9% in 1996 and 2.3% in 1997.
In a landmark case, the European Court of Justice (ECJ) ruled on 5 July 1994 against the British practice of importing produce from Northern Cyprus based on certificates of origin and phytosanitary certificates granted by the de facto authorities.
After robust growth rates in the 1980s (average annual growth was 6.1%), economic performance in the 1990s was mixed: real GDP growth was 9.7% in 1992, 1.7% in 1993, 6.0% in 1994, 6.0% in 1995, 1.9% in 1996 and 2.3% in 1997.
Cyprus ratified the new world trade agreement (General Agreement on Tariffs and Trade, GATT) in 1995 and began implementing it fully on 1 January 1996.
After robust growth rates in the 1980s (average annual growth was 6.1%), economic performance in the 1990s was mixed: real GDP growth was 9.7% in 1992, 1.7% in 1993, 6.0% in 1994, 6.0% in 1995, 1.9% in 1996 and 2.3% in 1997.
Cyprus ratified the new world trade agreement (General Agreement on Tariffs and Trade, GATT) in 1995 and began implementing it fully on 1 January 1996.
The decision resulted in a considerable decrease of Turkish Cypriot exports to the EU: from $36.4 million (or 66.7% of total Turkish Cypriot exports) in 1993 to $24.7 million in 1996 (or 35% of total exports) in 1996.
After robust growth rates in the 1980s (average annual growth was 6.1%), economic performance in the 1990s was mixed: real GDP growth was 9.7% in 1992, 1.7% in 1993, 6.0% in 1994, 6.0% in 1995, 1.9% in 1996 and 2.3% in 1997.
Under the latest economic protocol (signed 3 January 1997), Turkey has undertaken to provide loans totalling $250 million for the purpose of implementing projects included in the protocol related to public finance, tourism, banking, and privatization.
EU accession negotiations started on 31 March 1998, and concluded when Cyprus joined the organization as a full member in 2004. ===Investment climate=== The Cyprus legal system is founded on English law, and is therefore familiar to most international financiers.
The economy of Cyprus is a high-income economy as classified by the World Bank, and was included by the International Monetary Fund in its list of advanced economies in 2001.
In 2002 a modern, business-friendly tax system was put in place with a 12.5% corporate tax rate, one of the lowest in the EU.
EU accession negotiations started on 31 March 1998, and concluded when Cyprus joined the organization as a full member in 2004. ===Investment climate=== The Cyprus legal system is founded on English law, and is therefore familiar to most international financiers.
Cyprus's legislation was aligned with EU norms in the period leading up to EU accession in 2004.
In fiscal 2007, it amounted for 21.1 percent of total exports of Cyprus.
Cyprus adopted the euro as its official currency on 1 January 2008, replacing the Cypriot pound at an irrevocable fixed exchange rate of CYP 0.585274 per €1. The 2012–2013 Cypriot financial crisis, part of the wider European debt crisis, has dominated the country's economic affairs in recent times.
Overvaluation of the Cypriot pound prior to the adoption of the euro in 2008 had kept inflation in check. Trade is vital to the Cypriot economy — the island is not self-sufficient in food and until the recent offshore gas discoveries had few known natural resources – and the trade deficit continues to grow.
The Cyprus Tourism Organization has a status of a semi-governmental organisation charged with overseeing the industry practices and promoting the island worldwide. ==Trade== In 2008 fiscal aggregate value of goods and services exported by Cyprus was in the region of $1.53 billion.
Prominent goods and services imported by Cyprus in 2008 were consumer goods, machinery, petroleum and other lubricants, transport equipment and intermediate goods. ===Cypriot trade partners=== Traditionally Greece has been a major export and import partner of Cyprus.
The Cypriots are among the most prosperous people in the Mediterranean region, with GDP per capita in 2020 exceeding $27,000 in nominal terms and $40,000 on the basis of purchasing power parity. Their standard of living is reflected in the country's "very high" Human Development Index, and Cyprus is ranked 23rd in the world in terms of the Quality-of-life Index. However, after more than three decades of unbroken growth, the Cypriot economy contracted in 2009.
Furthermore, Cyprus was dealt a severe blow by the Evangelos Florakis Naval Base explosion in July 2011, with the cost to the economy estimated at €1–3 billion, or up to 17% of GDP. The economic achievements of Cyprus during the preceding decades have been significant, bearing in mind the severe economic and social dislocation created by the Turkish invasion of 1974 and the continuing occupation of the northern part of the island by Turkey.
In 2011, Noble Energy estimated that a pipeline to Leviathan gas field could be in operation as soon as 2014 or 2015.
Cyprus adopted the euro as its official currency on 1 January 2008, replacing the Cypriot pound at an irrevocable fixed exchange rate of CYP 0.585274 per €1. The 2012–2013 Cypriot financial crisis, part of the wider European debt crisis, has dominated the country's economic affairs in recent times.
In January 2012, Noble Energy announced a natural gas field discovery.
Some other important names in this regard are UK and Italy. ==Eurozone crisis== In 2012, Cyprus became affected by the Eurozone financial and banking crisis.
In June 2012, the Cypriot government announced it would need € of foreign aid to support the Cyprus Popular Bank, and this was followed by Fitch down-grading Cyprus's credit rating to junk status.
Fitch said Cyprus would need an additional € to support its banks and the downgrade was mainly due to the exposure of Bank of Cyprus, Cyprus Popular Bank and Hellenic Bank (Cyprus's 3 largest banks) to the Greek financial crisis. In June 2012 the Cypriot finance minister, Vassos Shiarly, stated that the European Central Bank, European commission and IMF officials are to carry out an in-depth investigation into Cyprus' economy and banking sector to assess the level of funding it requires.
The Ministry of Finance rejected the possibility that Cyprus would be forced to undergo the sweeping austerity measures that have caused turbulence in Greece, but admitted that there would be "some negative repercussion". In November 2012 international lenders negotiating a bailout with the Cypriot government have agreed on a key capital ratio for banks and a system for the sector's supervision.
In March 2013, the Cypriot government reached an agreement with its eurozone partners to split the country's second biggest bank, the Cyprus Popular Bank (also known as Laiki Bank), into a "bad" bank which would be wound down over time and a "good" bank which would be absorbed by the larger Bank of Cyprus.
Cyprus has the tenth-largest registered fleet in the world, with 1,030 vessels accounting for 31,706,000 dwt as of 1 January 2013. ==Tourism== Tourism is an important factor of the island state's economy, culture, and overall brand development.
According to the World Economic Forum's 2013 Travel and Tourism Competitiveness Index, Cyprus' tourism industry ranks 29th in the world in terms of overall competitiveness.
They also set a core Tier 1 ratio – a measure of financial strength – of 9% by the end of 2013 for banks, which could then rise to 10% in 2014. In 2014, Harris Georgiades pointed that exiting the Memorandum with the European troika required a return to the markets.
Creditor confidence was also strengthened, allowing Bank of Cyprus to reduce its Emergency Liquidity Assistance to €2.0 billion (from €9.4 billion in 2013).
In 1991, Cyprus introduced a value-added tax (VAT), which is at 19% as of 13 January 2014.
In 2011, Noble Energy estimated that a pipeline to Leviathan gas field could be in operation as soon as 2014 or 2015.
The industry has been honored with various international awards, spanning from the Sustainable Destinations Global Top 100, VISION on Sustainable Tourism, Totem Tourism and Green Destination titles bestowed to Limassol and Paphos in December 2014.
They also set a core Tier 1 ratio – a measure of financial strength – of 9% by the end of 2013 for banks, which could then rise to 10% in 2014. In 2014, Harris Georgiades pointed that exiting the Memorandum with the European troika required a return to the markets.
After a three-and-a-half-year recession, Cyprus returned to growth in the first quarter of 2015.
In 2011, Noble Energy estimated that a pipeline to Leviathan gas field could be in operation as soon as 2014 or 2015.
Cyprus successfully concluded its three-year financial assistance programme at the end of March 2016, having borrowed a total of €6.3 billion from the European Stability Mechanism and €1 billion from the IMF.
The Cypriots are among the most prosperous people in the Mediterranean region, with GDP per capita in 2020 exceeding $27,000 in nominal terms and $40,000 on the basis of purchasing power parity. Their standard of living is reflected in the country's "very high" Human Development Index, and Cyprus is ranked 23rd in the world in terms of the Quality-of-life Index. However, after more than three decades of unbroken growth, the Cypriot economy contracted in 2009.
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