International rating agency DBRS Morningstar projects that the growth rate of the Cyprus economy for this year will remain at 2.1%, according to figures it published on Friday in its June 2023 update on key macroeconomic scenarios for the states it assesses.
DBRS estimates that in 2024 the Cypriot GDP will expand at a rate of 2.4%, marking an insignificant marginal upgrade of the estimate by 0.1% compared to the corresponding December 2022 forecast.
The unemployment rate this year is estimated to be 6.8% (+0.2%) before dropping to 6.4% in 2024 (unchanged from the December forecast).
In its commentary, DBRS notes that forecasts for growth this year have been broadly revised upwards, while, in contrast, the estimate for the growth rate for 2024 has been revised downwards, as economists drive the estimated economic slowdown or even mild recession at a later stage.
DBRS notes however that for some smaller developed economies, particularly in Europe, growth forecasts have been revised upwards for both 2023 and next year. For Greece, it estimates that growth in 2023 will rise to 1.5% (+0.4%) and will be set at 1.5% (+0.1%). In Germany, it is estimated that a contraction of 0.1% will be recorded (-0.1% from the previous forecast), while in 2024 a growth of 1% is recorded (unchanged).
DBRS has revised its estimates for the UK economy, estimating that GDP will grow by 0.2% this year, down from -0.2% last December, while it fell by 0.1% the estimate for the growth rate in 2024 (0.8%).
But DBRS estimates that a tighter monetary policy is likely to have a stronger impact later this year and towards 2024. It estimates however that simultaneous recession in most major advanced economies may prove to be too pessimistic.
DBRS also noted that the turmoil in the banking sector has been contained, although pressures on less diversified banks could re-emerge if losses in commercial real estate begin to multiply.
Source: Cyprus News Agency