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CYPRUS
Economy

Cities in CYPRUS

Nicosia (lefkosia)Paphos

Economy

General

After independence in 1960, the economy of Cyprus developed well, partly due to the skilful use of the development aid received. Unemployment and emigration decreased, but the increasing prosperity largely benefited the Greek part of the population. After Cyprus was split into a Greek and a Turkish part in 1974, the two parts grew further apart economically. After the economic downturn in 1974, the economy of the Greek part of Cyprus recovered remarkably. After rapid growth in the second half of the 1970s, economic growth stabilised in mid 1985 at 3.8% with an unemployment rate of 3.4%. The inflation rate in 1985 was 5%. These key figures remained virtually unchanged in the following ten years. The share of the working population in agriculture (32% in the Turkish part and 13% in the Greek part) declined due to the growth of industry, construction, trade and tourism. The trade deficit is partly compensated by the income from the stay of British and UN troops on the island and remittances from emigrants. However, since 1980, the foreign debt has increased sharply. The economy of the Turkish part was almost exclusively oriented towards Turkey. Cut off from much international aid (except from Turkey) and from many export opportunities (since 1983 the EC only imports through Greek Cyprus), its growth lagged far behind that of the Greek part of Cyprus. Northern Cyprus is mainly an agricultural area. 80% of exports are agricultural products that are almost exclusively exported to Turkey. (Greek) Cyprus was severely affected by the crisis in the years 2010-2013 and is under close international supervision. The economy contracted by almost 13% in 2013. In the following years, the economy recovered somewhat and in 2017 it grew by 3.9%.

Agriculture, livestock, fisheries

Of the island's area, 46% is arable land and cereals are the most widely cultivated. This is followed by potatoes, tropical fruits, carob and fodder crops. Many fruits and vegetables are exported, including almonds, figs, tobacco, carrots and cotton. The farmers often have small family businesses. Through land consolidation, among other things, they try to produce in a more modern and efficient way. About 30% of the available arable land is irrigated. The most important area is the Messaoria plain, east of Nicosía.

Cattle breeding is becoming more important, although cattle breeding is declining as pastures are increasingly converted to arable land. Sheep and goats used to be kept for domestic consumption; nowadays, cows and sheep are bred for milk and meat production. The same applies to pigs and poultry.

The fishing industry is also improving. About 2700 tonnes are processed per year. Thanks to better techniques, fish is even being exported again. Approximately 1750 km2 of the surface area of Cyprus is covered with forest.

Mining and energy

Mining and raw material supply are largely concentrated in the Greek part. Copper, iron, chrome ores, asbestos, marble and gypsum are mined. For its energy supply, the island is almost entirely dependent on oil imports from the Middle East.

Trade and industry

Textiles are an important export product, followed by potatoes, shoes, cement and raw materials. Furthermore, canned fruit, wine, vegetables and olive oil are exported. Important export countries are mainly Greece, England and the Arab countries.

The trade balance shows a chronic deficit because Cyprus has to import a lot of products. The most important import products are foodstuffs, petroleum and petroleum products, machinery and chemical products. The main importers are England, the United States, Germany, Greece and Italy. An association agreement in 1973 and a protocol in 1988 facilitated the export of fruit and vegetables to the EC countries. The trade of the Turkish part is mainly directed to Turkey.

The industry is not doing well. Heavy industry is still almost non-existent. Small companies with no more than five employees dominate and mainly agricultural products are processed; the main branches are the food, shoe, textile, paper and tobacco industries. In the cities, there are still many sole proprietorships. Near Larnaka, a petroleum refinery has been established by foreign oil companies. Other large companies include a cement factory, two iron foundries and a plastics factory. There are also four large bottling plants and distilleries. Most of the manufacturing industry is concentrated in the area around Nicosia and Limassol.

Sources

Bulmer, R. / Cyprus Kosmos-Z&K

Cyprus
Het Spectrum

Haan-van de Wiel, W.H. de / Cyprus Gottmer

CIA - World Factbook

BBC - Country Profiles

Last updated December 2022
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