Over the course of the past few months, economic prospects in the Eurozone have considerably improved.
As a result of structural reforms in elementary policies, we are now seeing the Eurozone generating the growth and prompting greatly needed job opportunities. The estimated growth of around 1.8% has boosted the inflation by approximately 1.3%, peaking in manufacturing, construction and retailing. As the job opportunities are rising, so are the wages, hence the rise in private consumption of the general public. By the end of the year, an encouraging 1.7% overall growth is expected, continuing on the same path in 2018. Slow but steady, right? With a reinforced economic activity and an increase in inflation, European Central Bank is expected to revoke the emergency stance. Still, the uncertainties in political environment of the Eurozone remain.
The Article 50 has now been set off and the Brexit process has commenced. We are looking at a two-year period of negotiations, setting the term of the separation, ultimately determining how will current arrangements end and shape the future relationship between the European Union and the UK. Principal concerns are trade agreements, access to single market, customs union and changes to immigration rules. The complex separation process will be closely regarded, as the outcome is extremely important for the businesses in the region – politically, economically and regulatory wise.
Following the recent elections in Austria and the Netherlands, European electorate has voted against far-right for the third time in the last 6 months – this Sunday, 7th May 2017, the pro-EU candidate Emmanuel Macron has won the second round of the elections. With focus on the upcoming legislative election in June, French Presidential elections are taking a lot of attention, as a victory against populist wave which might be building a momentum in the EU. After June, the next high-stake appointment is the German federal election in September.
Pace of the reforms in Cyprus has been praised by the officials with the EC as slow, but steady. The growth rate projection for the 2-year period is close to 3% and the Government is determined to avert making the same mistakes, according to Finance Minister Harris Georgiades. The economy is growing, the banking sector has been put on a sound footing, the unemployment in April 2017 (32,804) has dropped by 11.31% since April 2016 (36,986) and Cyprus has been ranked sixth in Holger Schmieding’s December 2016 report. Hence, it is safe to assume that things are looking good for Cyprus.
Cyprus is hitting a new record with the 13.5% increase in tourist arrivals for the period between January and March 2017, compared to the same period in 2016. Specifically, an increase of 22.9% in revenue from tourism has been recorded for Jan-Feb 2017, amounting to €82M (compared to €66.7M for the same period in 2016).
Company Registrations & Property Sales
Company registrations have also recorded an increase of 8.6% for March 2017 (compared to March 2016), whereas the increase in property sales has reached its highest since 2011, measuring 16% increase in March 2017 (compared to March 2016).
Cyprus’ Exclusive Economic Zone (EEZ)
The 3rd licensing round for offshore exploration in Cyprus EEZ has been concluded, as the contracts for exploration and production sharing for Block 6 and 8 have been signed on 6th April 2017, between Cyprus government and the consortium of ENI Cyprus Limited and Total E&P Cyprus B.V. (licensed for Block 6), and ENI Cyprus Limited (licensed for Block 8). The day before, on 5th April 2017, contract has been signed with the consortium of companies ExxonMobil Corporation and Qatar Petroleum for the Block 10.
Foreign Direct Investment
This significant contributor in Cyprus’ recovery has marked a staggering increase of 9.1% in 2016, compared to the previous year. As Cyprus focuses on projects that encourage the overall development, processes are being streamlined and legislations modernized, to sustain investors’ interest. In addition to the tourism boost, further tax incentives are being introduced and large-scale projects developed, making Cyprus one of the top of foreign direct investment locations.
Fast-Track Citizenship in Cyprus
Following the trail of ultra-high net worth immigration and citizenship acquisition, Europe holds the first place with over 50% of total global citizenship applications. For people with a very demanding work schedule, expedited procedures are the only viable option, compared to standard procedure in most of the EU member states that would take between 4 and 7 years to acquire citizenship. Cyprus is going an extra mile to encourage and welcome foreign investors by further revising the economic criteria. ‘Scheme for Naturalization of non-Cypriot investors by exception’ is now achievable (subject to terms and conditions) within 6 months with an investment to the country, via purchase of e.g. personal residence, starting from €2M. FinExpertiza Cyprus is registered (Reg.No: 503) with the Registry of Service Providers of the Cyprus Investment Programme. For more information and/or advice, please contact us via email at email@example.com
 Holger Schmieding – one of the top analysts with the proven accuracy of his forecasts; currently Chief Economist at Berenberg Bank, a Hamburg-based multinational investment banking and private banking company; assesses the economic progress of all 28 EU member states.