14/10/2020 09:11
The IMF said that the Cypriot economy will recover from the Covid-19 pandemic in a more modest rate than its earlier projections.
According to the IMF World Economic Outlook (WEO), October 2020, the Cypriot real GDP is projected to shrink by 6.4%, compared to 6.5% in the April 2020 WEO, in a less severe recession compared to the Euro Area where the economy is expected to shrink by 8.3% in 2020 (from 6.6% in the April WEO).
In 2021, the Cypriot economy is projected to grow by 4.7% compared with 5.6% of the April WEO with the Euro Area expected to recover with 5.2%.
According to the IMF WEO unemployment from 7.1% in 2019 is estimated to rise modestly in 2020 reaching 8%, and decline further to 7% in 2021, compared with the respective projections for 8.8% and 7.4% respectively in the April WEO.
Cyprus’ current account balance is projected to spike to -10.6% in 2020 from -6.7% in 2019 and will decline to -9.1% in the following year, while is projected to decline to -3.5% in 2025.
According to the IMF, the global economy is expected to decline with 4.4% in 2020 and will recover in the following year with 5.2%.
“The global economy is climbing out from the depths to which it had plummeted during the Great Lockdown in April,” the report said, noting however that “with the COVID-19 pandemic continuing to spread, many countries have slowed reopening and some are reinstating partial lockdowns to protect susceptible populations”.
The IMF also said that while recovery in China has been faster than expected, the global economy’s long ascent back to pre-pandemic levels of activity remains prone to setbacks.
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