The economy of Cyprus can generally be described as small, open and dynamic, with the service sector being the driving force behind it. Since its accession to the European Union on 1 May 2004, Cyprus has undergone significant economic and structural reforms that have changed the economic landscape. Interest rates have been liberalized, while price controls and investment restrictions have been lifted by full liberalization of foreign direct investment in Cyprus. In addition, other broader structural reforms have been promoted, covering the areas of competition, finance and the business sector.
The service sector is the fastest growing sector and its GNP contribution for 2011 is about 80.5%. This development reflects the gradual transformation of the Cypriot economy from an exporter of minerals and agricultural products between 1961-73 and an exporter of processed goods in the last part of the 1970s and early 1980s in an international tourist, of services in the 1980s, 90s and 2000s. The secondary sector (industry) provided around 17.1% of GDP in 2011. The primary sector (agriculture and fisheries) is constantly shrinking to just two, 4% of GDP in 2011.
The Cypriot economy is open, as shown by the share of total imports and exports on GDP, which reached about 90% in 2011. Cyprus's most important trading partners are the EU Member States, particularly Greece and the United States Kingdom, two countries that have been seriously affected by the economic crisis.
The private sector, dominated by small and medium-sized enterprises, has a leading role in the production process. On the other hand, the government's role is mainly private sector support and market regulation in order to maintain the conditions for macroeconomic stability and a favorable business climate by creating the necessary legal and institutional framework and conditions to ensure sound competition.
In recent years, Cyprus has experienced a rise in living standards, as evidenced by the high level of real convergence with the EU. Gross domestic product per capita has reached about 98% of the EU-27 average for 2009.
Monetary and Foreign Exchange Policy
The accession of Cyprus to the euro area on 1 January 2008 resulted in a loss of monetary policy autonomy. As a result, the Central Bank of Cyprus has become part of the European System of Central Banks (ESCB), which, together with the European Central Bank (ECB), pursues a monetary policy for the whole of the Eurozone on the basis of the Treaties concerned.
Central Bank: www.centralbank.gov.cy
Ministry of Finance: www.mof.gov.cy
Department of Inland Revenue: www.mof.gov.cy/ird
Department of Registrar of Companies and Official Receiver: www.mcit.gov.cy/drcor
Merchant Shipping Department: www.shipping.gov.cy
Cyprus Chamber of Commerce and Industry: www.news.ccci.org.cy