Inflation will be 0.8 per cent in 2020 and 1.2 per cent in 2021.
Due to the buoyant domestic demand “Cyprus’ real GDP grew strongly in the third quarter of 2019, according to the European Commission.
The business sentiment remained strong in services and manufacturing stated according to the European Commission.
Additionally, as claimed by EC the unemployment rate fell rapidly to 7.2 per cent in the third quarter of 2019, the lowest level since 2011. The assumption for the private consumption is to remain durable given positive labor market expectations and rising wages.
According to the European Commission report “public spending is also set to boost growth, driven by increasing public wages and government expenditure in relation to the newly established National Health System. Investment in residential buildings is a key driver of activity and is expected to continue in the medium term, as suggested by improved order books and increasing building permits,” the EC said.
Moreover, “new bank lending to domestic non-financial companies and households is slightly picking up” as well.