Cyprus's economy is forecast to grow by 5.5% in 2022 on better than expected tourism arrivals, although the outlook is tempered by energy market turbulence which will sap demand later in the year, the island's Central Bank said on Thursday.
Updated projections of economic output were 2.8 basis points higher than previous projections made in June, the Central Bank said in a quarterly review.
The Central Bank said the impact of the war in Ukraine did not have a marked impact on economic activity in the first six months of the year. But it said energy markets turbulence was now having a knock-on effect on consumer and business sentiment, leaving eurozone economies "at a standstill" later in the year and into the first quarter of 2023.
It projected growth of 2.5% next year, on expectations of a long-drawn out conflict in Ukraine and scarring effects in the services sector.
Inflation was expected to reach 8.4% in 2022, before a "gradual correction" next year, where it was expected to reach 3.9%, the Central Bank said. (Reporting By Michele Kambas; Editing by Jon Boyle)