Cyprus IIP and current account balance deteriorate in Q1 2021

Cyprus International Investment Position (IIP) and current account balance deteriorated in the first quarter of 2021, according to provisional data released on Wednesday by the Central Bank of Cyprus (CBC).

According to the preliminary balance of payments data for 2021 Q1, the current account balance of Cyprus deteriorated, with the deficit increasing from €751.5 million in 2020 Q1, to €922.0 million, in 2021 Q1.

Adjusting for the impact of Special Purpose Entities (SPEs), that is, classifying SPEs as non-residents, the deficit amounted to €706 million in Q1 2021 from €611.1 million in Q1 of 2020.

According to the CBC, the Cyprus IIP deteriorated slightly in the end of Q1 2021 presenting a net liability position of €30,145.1 million compared with €29,446 million in the respective period of last year.

With the corresponding data adjusted for the impact of SPEs, Cyprus’ IIP recorded a net liability position of €11,208.6 million at the end of 2021 Q1, compared with a net liability position of €10,837.4 million, at the end of the previous quarter.

The gross external debt increased to €192,088.2 million in 2021 Q1 from €189,307.3 million in 2020 Q4, with external assets in debt instruments increasing to €114,375.4 million, up from €112,421 million in 2020 Q4.

As a result, net external debt increased by €826.6 million to €77,712.8  million, over 2021 Q1, the CBC added.

Adjusted for the impact of SPEs, gross external debt amounted to €62,132.7 million at the end Q1 of 2021, compared to €59,769.4 million, at the end of 2020 Q4.

The corresponding net external debt indicator increased to -€450.3 million, compared with -€869.8 million at the end of the previous quarter, the CBC said.