The financial sector remains resilient as a whole and is able to absorb any unexpected shocks, the Central Bank of Cyprus said on Tuesday in its annual Financial Stability Report for 2023.
It listed the risks from which financial institutions need to shield themselves and called on them to demonstrate social sensitivity in their pricing and business operations.
Despite the adversity of two wars in the region, the sanctions imposed and adverse developments in the US banking sector and Switzerland in 2023, the Cypriot economy showed resilience and adaptability, the CBC said.
Specifically, in 2023, the Cypriot economy continued to grow, albeit at a lower rate compared to 2022, with real GDP increasing by 2.5 per cent, compared to 5.1 per cent in 2022.
In addition, inflation averaged 3.9 per cent, down significantly from the average of 8.1 per cent recorded in 2022, with CBC pointing to ECB’s restrictive monetary policy and significant increases in benchmark interest rates in 2023 as the main reason for the slowdown.
