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Macroeconomic Development of CyprusCamille Jean O. NavaMaria Carla R. MaagoN3 Cyprus

Economic HistoryCyprus became independent from the UK in 1960.It became a member of the EU in 2004.It adopted the euro as its national currency in 2008.It is an exporter of minerals and agricultural products in 1961-73 and an exporter of manufactured goods from the late 1970s to the early 1980s.But, it transformed into an international tourist, business and services center in the 1980-1990s.Economic HistoryIt is classified by the World Bank as a high-income country.The economy is mainly built upon the services sector, including tourism, financial services and real estate, which accounts for over 80% of the islands total GDP and around 75% of employment.Growth IndicatorsGross Domestic Product

GDP Annual Growth Rate

GDP Annual Growth Rate

January 1, 2008:Introduction of the euroFebruary 2008:The leader of the communist party was elected president of the republic.The government started overspending immediately.2010:Financial crisis hit GreeceMay 2011:Cyprus lost its access to financial marketsJuly 2011:Destruction of the islands largest power station threw the economy into recessionFebruary 2013:The communism leadership in Cyprus ended.March 2013:A 10 billion euro EU bailout plan centered on bank restructuring.

Unemployment Rate

Unemployment Rate

Unemployment Rate

Unemployment Rate (Jan 2013-Jan 2014)

Unemployment Rate2008: nearly full employment at 3.20% unemploymentOctober 2013: all-time high unemployment rate of 16.80%30% of the current labor force is non-CypriotAbsence of a political settlement in the northern area poses inherent risks for foreign investors.Freedom from corruption: 64%

Markets (Currency)During October and November 2014, the exchange rate remained at 1 Euro=1.25 US dollars.

Markets (Currency)The Euro remained unchanged at 1.25 US dollars in November from 1.25 in October of 2014.Highest- 1.86 in July, 1973Lowest- 0.69 in February 1985Average- 1.35 from 1957 to 2014Prices (Inflation Rate)

In October 2014, the inflation rate in Cyprus was at -0.49.Prices (Inflation Rate)The inflation rate in Cyprus was at -0.49 in October 2014Highest- 18.75% in July 1951Lowest- -3.59% in October 1961Average- 4.07% from 1951 to 2014Inflationary pressures are expected to remain low as a result of weak demandReferencesGraphs retrieved from www.tradingeconomics.comOrphanides, A. (2014). What Happened in Cyprus? The Economic Consequences of the Last Communist Government in EuropeAn interview with Athanasios Orphanides What happened in Cyprus The Economist (2014)www.centralbank.gov.cy/media/pdf/CBC_book_EN.pdfwww.cia.gov/library/publications/the-world-factbook/geos/cy.htmlhttp://www.heritage.org/index/country/cyprushttp://www.oanda.com/currencyhttp://www.countrystudies.us