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Cyprus: Staff Report for 2014 Article IV Consultation—Supplementary Information

Author(s):
International Monetary Fund. European Dept.
Published Date:
October 2014
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1. This supplement provides information that has become available since the issuance of the staff report on October 3, 2014. This information does not alter the thrust of the staff appraisal.

2. Cyprus’s nominal GDP level for 2013 was revised up by about 10 percent. This revision follows the adoption of ESA2010 methodology, the incorporation of new data (such as the results of the 2011 population census), and other improvements in data compilation. Despite the shift in the level of GDP, its growth rate since 2008 was largely unchanged. All demand components were revised, in particular capital formation, exports and imports. The revision was the largest among euro-area countries, and significantly larger than the euro-area average of 3 percent.

Size of Nominal GDP Revision under ESA2010, 2013

(In percent of GDP under ESA95)

Sources: Eurostat; and IMF staff estimates.

Sources of Revision, 2013
Revision (%)
Adoption of ESA 20101.0
Incorporation of new data6.4
Improved methods of compilation2.4
In total9.8
Source: Cystat.
Source: Cystat.
Sizes of Revision, 2013
Revision (%)Revision (mln)
Gross Domestic Product (GDP)9.81,615
Private consumption7.6865
Fixed capital formation26.9516
Exports of goods & services23.91,779
Imports of goods & services22.01,578
Sources: Cystat; and IMF staff estimates.
Sources: Cystat; and IMF staff estimates.

Cyprus: Real GDP

(Percent change, year-on-year)

Sources: Cystat; and IMF staff estimates.

Cyprus: Nominal GDP

(Percent change, year-on-year)

Sources: Cystat; and IMF staff estimates.

3. The sizeable GDP revision implies a reduction in key macroeconomic ratios. For example, as a result of the higher denominator, the 2013 debt-to-GDP ratio would become 102 percent of GDP (rather than 112 percent), and the fiscal deficit-to-GDP ratio would be 4.4 percent of GDP (compared to 4.9 percent). The public debt projections would correspondingly shift downward. Private sector indebtedness would be 370 percent of GDP (rather than 410 percent). On the external side, the end-2013 current account deficit-to-GDP ratio would amount to 1.7 percent of GDP (rather than 1.9 percent), while the external-debt-to-GDP ratio would be 317 percent of GDP (rather than 348 percent).

Cyprus: Gross Nominal Public Debt

(In percent of GDP)

Sources: Cystat; Eurostat; and IMF staff estimates.

4. Other data revisions are expected later this year, that could further affect key macroeconomic ratios. The adoption of the ESA2010 methodology for the fiscal accounts is expected in the last quarter of the year. On the BoP side, the authorities are expected to switch to BPM6 in November. These methodological changes are expected to lead to further changes to the fiscal and external accounts, which may partly offset the effect of the GDP level increase.

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