Uncategorized

30 Nov 2016 Sapienta Country Analysis Executive Summary Nov 2016

The following is a shortened version of the executive summary in the subscription product. Contacts us for a free trial Political analysis and outlook: We are holding the prospects of a solution of the Cyprus problem within the next 12 months at 45% as efforts to keep the talks going continue, but are putting them on review for a significant downgrade. Structural reforms and natural gas: The timetable for gas drilling is still uncertain at a time when gas competition is increasing. Local government reform has been postponed but healthcare reform is making steady progress. Fiscal performance and forecast: Revenue growth turned positive in September and the government is keeping a tight rein on spending. An agreement with the unions will limit pay rises in 2017. Banking sector: The Bank of Cyprus London listing is going ahead, although the bank is not yet ready to list on the premium index. Deleveraging is taking place both among performing and non-performing loans. Macroeconomic trends and forecast: Quarterly real GDP growth slowed slightly in the third quarter but accelerated year on year. Indicators on consumer spending are mixed. We have revised down our real GDP forecast to 2.8% in 2016 and 2.6% in...

Read More

27 Nov 2016 The lost opportunities of a Cyprus velvet divorce

Even before the collapse of the Cyprus negotiations in Mont Pelerin on Monday, the words ‘velvet divorce’ had been creeping up in conversations. The gist of the argument is that Cypriots are incapable of living together, so let’s end the Cyprus problem with a deal to live apart. If this is the game-plan of some of the players, then it is important to look at what is lost by not bringing the island back together in a single federal state. The first and most important is that it robs Cyprus of the greatest chance it has ever had to become secure. Because of its strategic location, Cyprus has been the ‘collateral damage’ of big-power rivalries for thousands of years. The memory and resentment of this runs deep in the Cypriot psyche. Read full...

Read More

20 Nov 2016 How far have Cyprus property prices fallen?

This week, the Central Bank of Cyprus published its residential property price index for the second quarter of 2016. Prices dropped by a comparatively mild 0.5% over the previous period and by 1.7% compared with the second quarter of 2015. If you own an apartment in Paphos, the news was even better, as it was the only region that saw a year-on-year rise. Apartment prices rose by 3.3% over the same period of the previous year, although they slipped by 0.9% compared with the previous quarter. House prices in Paphos were also up 0.4% year on year. Read full...

Read More

12 Nov 2016 Clouds over next year’s Cyprus tourism season

In 2016 Cyprus enjoyed a bumper tourism season, with arrivals rising by 18.8% in January-September and reaching a record 2.6 million. This week, the Minister of Commerce, Energy, Industry and Tourism, Yiorgos Lakkotrypis tweeted: “Cautiously optimistic for another strong year of #UK visitation to #BeautifulCyprus”. I hope he is right. But there are a few reasons to suggest that next year will be rather tougher than this year. Let’s take a look at the numbers to see why. Read full...

Read More

06 Nov 2016 Banks should step up on Cyprus problem

Next week, Nicos Anastasiades and Mustafa Akinci will spend five days at Mont Pèlerin hashing out some of the most politically thorny aspects of the Cyprus problem. If things go well, then we shall be well on our way to the final phase: the multi-party conference in which the security aspects of the Cyprus problem are worked out and we reach a grand political deal. What the leaders will not come back from the mountain with is tablets of stone, dictated by the Almighty, on how this is all going to be financed. Read full...

Read More

22 Oct 2016 Northern Cyprus demographics: an update

This week the topic of the demographics of a united Cyprus has been back in the news again. President Nicos Anastasiades said that 40,000 people of Turkish origin could stay in Cyprus after a settlement (he quickly corrected a slip of the tongue where he mentioned 90,000). It is therefore an appropriate moment to pick up what has been said and update some of the figures I presented in April 2015, in an article called ‘Northern Cyprus demographics: who is voting?’ Let’s walk through some of those numbers again and update them. Read full...

Read More