HOW CYPRUS’ ECONOMY COPED WITH THE COVID-19 PANDEMIC
HOW CYPRUS’ ECONOMY COPED WITH THE COVID-19 PANDEMIC

Summary/Abstract: This paper assesses how Cyprus’ economy coped with the Covid-19 pandemic by generating two series of forecasts with wavelet analysis: forecasts using data including the pandemic (from Q4 1997 to Q2 2022) and not including the pandemic (from Q4 1997 to Q3 2019). The difference of their averages is an indicator of the resilience of the economy during the pandemic, the greater the difference, the more resilient the economy. Eurozone and Germany are used as benchmarks: subtracting the Q3 2022 to Q4 2050 GDP growth rate (quarterly and annualized) average forecast of Cyprus obtained with the Q4 1997-Q2 2022 data, +1.62%, by the one obtained with the Q4 1997-Q3 2019 data, +1.47%, the difference is +0.15% whereas with Eurozone the difference is +0.11%, [+0.68% - (+0.57%)] and with Germany the difference is -0.12% [+0.89% - (+1.01%)]. Thus, Cyprus’ economy shows a slightly higher resilience (+0.15%) than the Eurozone’s (+0.11%) based on Q3 2022-Q4 2050 forecasts and a stronger resilience than Germany’s (-0.12%). Moreover, the average of the Q3 2022-Q4 2050 quarterly (annualized) growth rate forecasts of Cyprus is expected to be +1.62% with the Q4 1997-Q2 2022 data whereas it is expected to be only +0.68% for the Eurozone and +0.89% for Germany. Cyprus’ economy shows better prospects than the Eurozone’s and Germany’s economies.

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