Macroeconomic indicators
European Commission Forecast for 2014
|
|
Slovakia |
Cyprus |
|
Public budget balance |
-2.9% |
-5.8% |
|
GDP growth |
2.2% |
-4.8% |
|
Inflation |
0.4% |
0.4% |
|
Gross public debt |
56.3% |
122.2% |
|
Unemployment |
13.6% |
19.2% |
(Source: ec.europa.eu)
Growth Drivers
Major industries in which the Cyprus economy is focusing on growth include: gas exploration and exploitation, tourism, EU funds, shipping industry, international business, construction industry, farming and agriculture.
Additionally, the Cyprus Government will start implementing a privatization plan for some of the semi-governmental organizations, a process which will attract foreign investors, as well as commence a tender process for operating a casino resort in Cyprus.
Specific incentives are also provided to non-EU citizens to invest in Cyprus, including acquisition of immovable property.
Industries which the Slovakian economy is focusing on include: manufacture of motor vehicles, trailers, computers, electrical equipment, electronic and optical products, rubber and plastic products, processing of metals, machinery and equipment, chemicals and chemical products, pharmaceutical products, food products and beverage production.
Moreover the Slovakian government offers incentives for industrial production, technological and strategic service centres and the tourist sector. Incentives relate to the cost of acquisition of land, buildings and technological equipment. Investors can apply for investment grants, corporate tax relief, new job grants, and for the option to acquire property at lower than the market price subject to rules of the investment aid legislation.
Conclusion of the fourth review of the Cyprus adjustment program
‘Troika’ has visited the island and performed their fourth review of the Cyprus adjustment program.
There has been a steady progress towards the program objectives, which is the restoration of financial stability, fiscal sustainability and structural reforms.
‘Troika’ has revised its projections for 2014, anticipating a contraction of the economy of 4,2% (instead of 4,8% projected initially), as the economy continues to be more resilient than predicted at the beginning of the program.
(Source: reuters.com)
Economic expectations for Slovakia
The Organisation for Economic Co-operation and Develoment (OECD) expects positive growth for Slovakia in 2014 according to its latest Economic Outlook report, with the outlook for 2015 also being positive.
The growth mainly relates to the strengthening of export markets and a slowdown in fiscal consolidation. It is expected for investments to pick up progressively, unemployment to go down from 13,9% to 13,2% in 2015, and for household consumption to rise for the first time in years.
Due to the expected revival in the Eurozone, exports are expected to grow. The public debt in Slovakia is projected to reach 55,2% of the GDP in 2014 and 56,2% in 2015.
The latest European Commission Forecast (spring 2014) expects the country to enjoy economic growth in 2014 and 2015, despite an economic slowdown in 2013.
Over the forecast horizon, employment is expected to grow slowly but is projected to stay over 13%, while inflation will remain low.
(Source: The Daily.sk)
Tourism Industry in Cyprus
There was an increase of 11,4% in tourist arrivals in Cyprus in April 2014 as compared to April 2013. More specifically there was an 18,9% increase in arrivals from the UK, 13,7% from Russia, 1,7% from Germany and 22,7% from Greece. The total number of tourist arrivals between January and April 2014 showed an increase of 1,4% when compared with the same period in 2013.
(Source: CYSTAT)
Cyprus Bond Issue
The Ministry of Finance of Cyprus announced the successful issuance via private placement of a six year international bond for a nominal value of €100.000 at a coupon rate of 6,50% p.a.
The success of the above transaction is attributed to the gradual rebuilding of confidence in the economy of Cyprus, which in turn is the result of a stronger than expected performance and a full compliance of Cyprus with the ESM/IMF adjustment program.
The Ministry of Finance will continue its assessment of market conditions and options as part of a broader strategy aimed at a full restoration of market access.
(Source: Cyprus Ministry of Finance)