macroeconomic analysis of cyprus

8/13/2019 Macroeconomic Analysis of Cyprus

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Team Members:

Kamalam

Shri Durga

AdityanSriram

Venkatesan


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Cyprus has adopted the euro.

CYPRUS STOCK MARKET (CYPRUS GENERAL)

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GDP of Cyprus is 22.98 Billion Dollars.

The GDP value of Cyprus represents 0.04 % of the world economy.

CYPRUS GDP ANNUAL GROWTH RATE IS -4.3.

Industrial Production in Cyprus decreased 16.80 percent in May of 2013.

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The inflation rate in Cyprus was recorded

at 0.08 % in June of 2013.

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Cyprus recorded a Government Debt to GDP of 85.80 percent of

the country's Gross Domestic Product in 2012.

Cyprus recorded a Government Budget deficit equal to 6.30

percent of the country's Gross Domestic Product in 2012.

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Major exports:

Petroleum oils, refined (21%),

Medicaments, packaged (13%),

Transistors, semiconductor devices;(7%), Citrus fruits(5%), Cigars (2%) ,

Major imports:

Petroleum oils, crude (23%), Cruiseships and similar vessels for thetransport of persons (13%), Cars

(6%), Other furniture and parts (2%)

Major trade partners (exports): Greece (23%), United Kingdom(19%), Germany (12%), Egypt (7%)

Major trade partners (imports):Greece (19%), China (18%), Israel(8%), United Kingdom (8%),

Germany (7%)

Cyprus


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It's an island and a member of the EU, but it'salso a tax haven. Those low taxes have made it apopular place for rich Russians to put their cash.

The result of all this money going into Cypruswas predictable: the banks grew to a ridiculouslylarge size, with assets being 8 times larger thanthe national GDP.

The big Cypriot banks made a really badinvestment. They lent money to Greece. Whenthe Greek economy took a dive, the Cypriot

banks took a bigger gamble, buying up Greekgovernment bonds in the hopes of a bailout. Nowthey're broke. The banks owe more money thanthey have. In fact they owe more money thanthe country's GDP.

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Even though the EU/IMF was lending 10 billion,that still wasnt enough to pay for the entirebailout. An additional 7 billion was needed, andthe EU was making Cypriots pay for thisremaining amount out of their own pockets.

1.2 billion of that would come from the

government austerity measures, such as cuts tospending and raising taxes. The remaining 5.8billion would come from imposing a tax onCypriot bank accounts. For people with accountsover 100,000 the tax would be 9.9%, while

accounts below that number would be taxed6.75%.

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Fearing the government was coming for their

cash, Cypriots ran to the bank. The

government declared a national holiday and

closed the banks, so everyone ran to the ATM

outside the bank. There were restriction on

how much cash could be withdrawn, but that

didn't stop people from waiting in long lines

to get what they could of their money.

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S&P Rating CCC

Moody's rating B3

Fitch Rating BB-

Extremely speculative.

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macroeconomic analysis of cyprus

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