Crisis in Israel could strike a serious blow to Cyprus’ economy

It’s one blow after another for the Cyprus economy in recent years – mostly from external factors – with the latest one being the prevailing Israeli-Hamas crisis, Philenews reported on Tuesday.

In 2011-13, the Cypriot economy was affected by the international financial crisis and domestic banking and fiscal parameters. This led to the Mediterranean island’s entry into a fiscal consolidation memorandum.

The coronavirus pandemic followed with the economy again going into a panic in 2020. And a year after the Covid-19 scare was controlled came the Russian invasion in Ukraine which is still going one.

The very serious side effects on the economy and the high inflation that was sparked from Russia’s invasion is now exacerbated further with the explosive situation between Israel and Hamas.

Although it is too early to make any assessments of the possible consequences, the Cyprus government’s economic team is closely monitoring the bleak development in the neighboring country.

It is expected that the tourism sector, which has recently seen an increase in tourist arrivals from Israel, will probably take the biggest hit. In August, tourist arrivals from Israel were up by 33,000 compared with the same month the year before.

Between January and August 2023, the total tourist arrivals amounted to 2,648,795 compared to 2,127,172 in the same period in 2022. This marks a significant increase of 24.5% while arrivals from Israel accounted for 14.9% (76,130) of total arrivals.