Economy Overview:

    The Greek Cypriot economy is small, diversified, and prosperous. Industry
    contributes 14% to GDP and employs 29% of the labor force, while the service
    sector contributes 53% to GDP and employs 57% of the labor force. An average
    6.8% rise in real GDP between 1986 and 1990 was temporarily checked in 1991,
    because of the adverse effects of the Gulf war on tourism. After surging
    8.5% in 1992, growth slowed to 2.0% in 1993 - its lowest level in two
    decades - because of the decline in tourist arrivals associated with the
    recession in Western Europe, Cyprus' main trading partner, and the loss in
    export competitiveness due to a sharp rise in unit labor costs. Real GDP is
    likely to have picked up in 1994, and inflation is estimated to have risen
    to between 5% and 6%. The Turkish Cypriot economy has less than one-third
    the per capita GDP of the south. Because it is recognized only by Turkey, it
    has had much difficulty arranging foreign financing, and foreign firms have
    hesitated to invest there. The economy remains heavily dependent on
    agriculture, which employs one-quarter of the work force. Moreover, because
    the Turkish lira is legal tender, the Turkish Cypriot economy has suffered
    the same high inflation as mainland Turkey. The small, vulnerable economy is
    estimated to have experienced a sharp drop in growth during 1994 because of
    the severe economic crisis affecting the mainland. To compensate for the
    economy's weakness, Turkey provides direct and indirect aid to nearly every
    sector; financial support has risen in value to about one-third of Turkish
    Cypriot GDP.


National product:
  Greek area:
    GDP - purchasing power parity - $7.3 billion (1994 est.)
  Turkish area:
    GDP - purchasing power parity - $510 million (1994 est.)
National product real growth rate:
  Greek area:
    5% (1994 est.)
  Turkish area:
    -4% (1994 est.)
National product per capita:
  Greek area:
    $12,500 (1994 est.)
  Turkish area:
    $3,500 (1994 est.)
Inflation rate (consumer prices):
  Greek area:
    4.8% (1993)
  Turkish area:
    63.4% (1992)
Unemployment rate:
  Greek area:
    2.3% (1993)
  Turkish area:
    1.2% (1992)
Budget:
  revenues:
    Greek area - $1.8 billion
    Turkish area -  $285 million
  expenditures:
    Greek area - $2.4 billion, including capital expenditures of $400 million
    Turkish area - $377 million, including capital expenditures of $80 million
    (1995 est.)


Industrial production:

    growth rate 0.1% (1993); accounts for 14% of GDP
Electricity:
  capacity:
    550,000 kW
  production:
    2.3 billion kWh
  consumption per capita:
    2,903 kWh (1993)


Economic Activity

Industries:

    food, beverages, textiles, chemicals, metal products, tourism, wood products
Agriculture:
    contributes 6% to GDP and employs 25% of labor force in the south; major
    crops - potatoes, vegetables, barley, grapes, olives, citrus fruits;
    vegetables and fruit provide 25% of export revenues

Exports:

    $868 million (f.o.b., 1993)


  Commodities:
    citrus, potatoes, grapes, wine, cement, clothing and shoes
   Major Trade Partners::
    UK 18%, Greece 9%, Lebanon 14%, Germany 6%


Imports:

    $2.6 billion (f.o.b., 1993)
  Commodities:
    consumer goods, petroleum and lubricants, food and feed grains, machinery
   Major Trade Partners::
    UK 13%, Japan 9%, Italy 10%, Germany 8%, US 8%
External debt:
    $2.4 billion (1993)