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Investment Opportunities in Cyprus 2013

In: Business and Management

Submitted By alancork
Words 2579
Pages 11
Foreign Investment Opportunities in Cyprus
Author: <Student>
Report Date: 10/4/2013

Executive Overview:
Foreword: New business investment recommendations in this report are based on medium - longer term opportunities (2 – 10 years) on the assumption that the current economic and political crisis affecting the general business and banking environment with restrictions on the free flow of capital funds into and out of Cyprus, make it impractical to execute any short term investments in this country.
The short term economic outlook looks uncertain and highly volatile. Cyprus faces an extremely challenging period requiring a major restructuring of its financial services industry. Whilst in theory, the Cypriot Banking industry’s exposure to Greek government debt has been factored into the existing EU bailout calculations, any further crisis in the Greek economy and potential for foreign deposits with drawls once the current capital transfer controls (blocks) are lifted, could lead to a new crisis in the Cypriot Banking sector which could require additional EU intervention and a further period of uncertainty and economic instability.
The overall effect on its economy of the current Troika ((EU, ECB, IMF) bailout conditions is yet to be felt. Future GDP short term projections vary; the IMF and EU is talking optimistically of a fall of between 5 -10% , other analysts predicts falls as great as 15% this year and another 5% in 2014 with unemployment ranging from 13.7% this year, and could exceed 20% in 2014 with gross debt at range of 97% to 110% of GDP .
Set against the economic contraction of the local economy is the possibility of social unrest and political uncertainty. This could be exasperated by external geopolitical factors such as Turkey’s position on the future unification of the island and the exploitation of offshore gas fields.
However, should...

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