Economy in Cyprus

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Economy—overview: The Greek Cypriot economy is small and prosperous but highly susceptible to external shocks. Industry contributes 22% to GDP and employs 25% of the labor force while the service sector contributes 89% to GDP and employs 62% of the labor force. 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. The Turkish Cypriot economy has about one-third the per capita Gkhkh7797976DP 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. In January 1997 Turkey signed a $250 million economic cooperation accord with the Turkish Cypriot area to support tourism education and industry.

GDP: purchasing power parity—$11.19 billion (Greek Cypriot area: purchasing power parity—$9.75 billion; Turkish Cypriot area: purchasing power parity - $1.44 billion) (1997 est.)

GDP—real growth rate: 2.4% (Greek Cypriot area: 2.5%; Turkish Cypriot area: 1.7%) (1997 est.)

GDP—per capita: purchasing power parity—$13 500 (Greek Cypriot area: purchasing power parity—$15 000; Turkish Cypriot area: purchasing power parity—$8 000) (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)

Inflation rate—consumer price index: Greek Cypriot area: 3.5% (1997 est.); Turkish Cypriot area: 87.5% (1997 est.)

Labor force:

total: Greek Cypriot area: 299 700

by occupation: services 62% industry 25% agriculture 13% (1995)

total: Turkish Cypriot area: 76 500 (1996)

by occupation: services 66% industry 11% agriculture 23% (1995)

Unemployment rate: Greek Cypriot area: 3.3% (1997 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—capacity: 666 000 kW (1995)

Electricity—production: 2.6 billion kWh (1995)

Electricity—consumption per capita: 3 530 kWh (1995)

Agriculture—products: potatoes citrus vegetables barley grapes olives vegetables


total value: Greek Cypriot area: $1.3 billion (f.o.b. 1996)

commodities: citrus potatoes grapes wine cement clothing and shoes

partners: Russia 19.1% Bulgaria 16.4% UK 11.3% Greece 6.3% Germany 4.8%

total value: Turkish Cypriot area: $70.5 million (f.o.b. 1996)

commodities: citrus potatoes textiles

partners: Turkey 48.2% UK 21.3% other EU 13.7%


total value: Greek Cypriot area: $3.6 billion (f.o.b. 1996)

commodities: consumer goods petroleum and lubricants food and feed grains machinery

partners: US 17.8% UK 11.9% Italy 9.7% Germany 7.5% Greece 7.6%

total value: Turkish Cypriot area: $318.4 million (f.o.b. 1996)

commodities: food minerals chemicals machinery

partners: Turkey 55.3% UK 13.8% other EU 11.6%

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

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

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

Exchange rates: Cypriot pounds per US1$—0.5326 (January 1998) 0.5135 (1997) 0.4663 (1996) 0.4522 (1995) 0.4915 (1994) 0.4970 (1993); Turkish liras (TL) per US$1—187 477 (November 1997) 81 405 (1996) 45 845.1 (1995) 29 608.7 (1994) 10 984.6 (1993)

Fiscal year: calendar year

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