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Economy - overview: The area of the Republic of Cyprus under
government control has a market economy dominated by the service sector, which
accounts for 78% of GDP. Tourism and financial services are the most important
sectors; erratic growth rates over the past decade reflect the economy's
reliance on tourism, which often fluctuates with political instability in the
region and economic conditions in Western Europe. Nevertheless, the economy in
the area under government control grew a healthy 3.7% to 3.8% per year in 2004,
2005 and 2006, well above the EU average. Cyprus joined the European Exchange
Rate Mechanism (ERM2) in May 2005 and adopted the euro as its national currency
on 1 January 2008. The government initiated an aggressive austerity program,
which cut the budget deficit to well below 3% of GDP. As in the area
administered by Turkish Cypriots, water shortages are a perennial problem; a few
desalination plants are now on line. After 10 years of drought, the country
received substantial rainfall from 2001-04 alleviating immediate concerns.
Rainfall in 2005 and 2006, however, was well below average, making water
rationing a necessity in 2007. The Turkish Cypriot economy has roughly 30% of
the per capita GDP of the south, and economic growth tends to be volatile, given
the north's relative isolation, bloated public sector, reliance on the Turkish
lira, and small market size. The Turkish Cypriot economy grew around 10.6% in
2006-07, fueled by growth in the construction and education sectors, as well as
increased employment of Turkish Cypriots in the area under government control.
Agriculture and services, together, employ more than half of the work force. The
Turkish Cypriots are heavily dependent on transfers from the Turkish Government.
Ankara directly finances around one-third of the "TRNC's" budget. Aid
from Turkey has reached over $400 million annually in recent years. GDP
(purchasing power parity): area under government control: $21.41
billion; $19.37 billion
area administered by Turkish Cypriots: $4.54 billion (2007 est.)
GDP (official exchange rate): Republic of Cyprus: $15.4 billion (2005
est.)
GDP - real growth rate: area under government control:
3.9%; 3.9%
area administered by Turkish Cypriots: 10.6% (2007 est.)
GDP - per capita (PPP): area under government control:
$27,100 $24,600
area administered by Turkish Cypriots: $7,135 (2007 est.)
GDP - composition by sector:
area under government control: agriculture 3.1%; industry 19.1%; services
77.8% (2005 est.)
area administered by Turkish Cypriots: agriculture 10.6%; industry 20.5%;
services 68.9% (2003 est.) (2007 est.)
Population below poverty line: NA
Household income or consumption by percentage share:
lowest 10%: NA
highest 10%: NA
Inflation rate (consumer prices): area under government
control: 2.3% 2.3% (2005 est.)
area administered by Turkish Cypriots: 9.1% (2004 est.) (2007 est.)
Investment (gross fixed): area under government control: 19.6%
of GDP 19.6% of GDP (2007 est.)
Labour force: area under government control: 391,000,
391,000
area administered by Turkish Cypriots: 95,025 (2007 est.)
Labour force - by occupation:
area under government control: agriculture 7.4%, industry 38.2%, services
54.4% (2004 est.)
area administered by Turkish Cypriots: agriculture 14.5%, industry 29%,
services 56.5% (2004 est.) (2004 est.)
Unemployment rate: area under government control: 3.8%;
3.8% (2005 est.)
area administered by Turkish Cypriots: 5.6% (2004 est.) (2007 est.) Budget:
area under government control: revenues: $8.957 billion; expenditures:
$9.16 billion (2005 est.)
area administered by Turkish Cypriots: revenues: $685.7 million;
expenditures: $432.8 million (2003 est.) (2007 est.) Public Debt:
area under government control: 61.5% of GDP 61.5% of GDP (2007 est.) Agriculture - Products: citrus, vegetables,
barley, grapes, olives, vegetables; poultry, pork, lamb; dairy, cheese Industries:
tourism, food and beverage processing, cement and gypsum production, ship
repair and refurbishment, textiles, light chemicals, metal products, wood,
paper, stone, and clay products
Industrial production growth rate: area under government
control: 2% 2% (2005 est.)
area administered by Turkish Cypriots: -0.3% (2007 est.)
Electricity - production: area under government control:
4.117 billion kWh; 4.117 billion kWh
area administered by Turkish Cypriots: 998.9 million kWh (2005)
Electricity - consumption: area under government control:
3.953 billion kWh; 3.953 billion kWh (2004)
area administered by Turkish Cypriots: 797.9 million kWh (2005)
Electricity - exports: area under government control: 0
kWh; 0 kWh (2005)
Electricity - imports: area under government control: 0
kWh; 0 kWh (2005)
Oil - production: area under government control: 300
bbl/day; 300 bbl/day (2005 est.)
Oil - consumption: area under government control: 56,000
bbl/day; 53,000 bbl/day (2005 est.)
Oil - exports: 0 bbl/day (2004)
Oil - imports: 51,640 bbl/day (2004)
Natural gas - production: 0 cu m (2005 est.)
Natural gas - consumption: 0 cu m (2005 est.)
Current Account Balance: area under government control: -$1.236
billion (2007 est.)
Exports: area under government control: $1.496 billion;
$1.496 billion f.o.b.
area administered by Turkish Cypriots: $68.1 million f.o.b. (2007 est.)
Exports - commodities: area under government control:
citrus, potatoes, pharmaceuticals, cement, clothing and cigarettes
area administered by Turkish Cypriots: citrus, dairy, potatoes, textiles
Exports - partners: UK 15.1%, Greece 14.2%, France 7.7%, Germany
4.9%, UAE 4.2% (2006)
Imports: area under government control: $6.828 billion;
$6.828 billion f.o.b.
area administered by Turkish Cypriots: $1.2 billion f.o.b. (2007 est.)
Imports - commodities: Republic of Cyprus: consumer goods, petroleum
and lubricants, intermediate goods, machinery, transport equipment; north
Cyprus: vehicles, fuel, cigarettes, food, minerals, chemicals, machinery
Imports - partners: Greece 17.6%, Italy 11.4%, Germany 9%, UK
8.9%, Israel 6.3%, France 4.3%, Netherlands 4.3%, China 4.2% (2006)
Reserves of foreign exchange & gold: area under government
control: $6.176 billion; $6.176 billion
area administered by Turkish Cypriots: $NA (31 December 2007 est.)
Debt - external: area under government control: $26.12 billion;
$26.12 billion
area administered by Turkish Cypriots: $NA (31 December 2007 est.)
Economic aid - recipient: area under government control:
$59.86 million
area administered by Turkish Cypriots: under a July 2006 agreement,
Turkey plans to provide the area administered by Turkish Cypriots 1.875 billion
YTL ($1.3 billion) over three years (600 million YTL in 2006, 625 million YTL in
2007 and 650 million YTL in 2008); Turkey has forgiven most past aid (2004)
Currency: Euro
Exchange rates: Cypriot pounds per US dollar: 0.4286 (2007),
0.4586 (2006), 0.4641 (2005), 0.4686 (2004), 0.5174 (2003)
Turkish lira per US dollar: 1.319 (2007), 1.4451 (2006), 1.3436 (2005),
1.426 million (2004), 1.501 million (2003)
Fiscal year: calendar year
This information comes from the CIA
World Factbook January 2008.
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