Just Released: "Cyprus Business Forecast Report Q4 2013"

BMI Political Risk Ratings

Political risk remains low given the country's strong democratic credentials in the modern era and good relations with its neighbours. That said, the political system has become more complicated due to the rise of five-party politics within the Bundestag. The current electoral system will normally produce two-party majority governments with up to four parties represented in parliament. However, the recent rise of the Green party shows that voter sentiment is shifting, creating a more complicated coalition structure. This could considerably complicate national-level policymaking for years to come as different interest groups grow in political strength.

Full Report Details at
- http://www.fastmr.com/prod/673188_cyprus_business_forecast_report_q4_2013.aspx?afid=301

Partial Table of Contents:

Executive Summary
Core Views
Major Forecast Changes
Key Risk To Outlook
Chapter 1: Political Outlook
SWOT Analysis
BMI Political Risk Ratings
Domestic Politics
Government's Reform Commitment To Be Tested
- The government of Cypriot President Nicos Anastasiades will increasingly encounter resistance to additional fiscal consolidation measures and structural reforms. Although some stability of the banking sector may be restored in the foreseeable future, confidence in the government's measures - particularly in light of continuing capital controls - will likely begin to fade, making future austerity measures more difficult to push through the legislature.
TABLE: POLITICAL OVERVIEW
Long-Term Political Outlook
Cyprus Problem, Economy Remain Dominant Issues
- Cyprus celebrated 50 years of independence on October 1 2010, yet the island remains divided along ethnic Greek and ethnic Turkish lines. Settlement talks between the leaders of the ethnic-Greek South and ethnic-Turkish North have been going on for several years with little in the way of progress, and the window of opportunity for finding a resolution is closing. Economic policy will also be at the forefront of discussion in the coming years, as the government struggles to deal with major fiscal austerity and an economic depression. In both cases, the downside risks to long-term stability are limited by strong democratic institutions operating within the EU framework.
Chapter 2: Economic Outlook
SWOT Analysis
BMI Economic Risk Ratings
Economic Activity
Major Pain Still Ahead
- Latest macroeconomic data reaffirm our belief that the Cypriot economy will continue to undergo a painful rebalancing process, which will see the economy contract by 9.0% in 2013. Although there are signs that the implosion of domestic demand is already seeing external imbalances unwind, we believe that it will be several years before real GDP growth returns to positive territory.
TABLE: GDP BY EXPENDITURE
Balance Of Payments
Painful Rebalancing On The Way

Full Table of Contents is available at:
-- http://www.fastmr.com/catalog/product.aspx?productid=673188&dt=t&afid=301

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