The report argues that the divided economies of Cyprus have reached their limits in terms of potential.
The authors would expect average incomes – gross domestic product (GDP) per capita – to be €6,800 to €11,000 higher than they would be without a solution and economic size (GDP) to be €11 billion to €17.4 billion larger. Under their baseline scenario, real GDP growth would be, on average, 3.8 per cent with a solution and only 2.3 per cent under the status quo.
Even under very conservative assumptions, and under two different forecasting methodologies, the authors find that a united Cyprus settlement would generate a significant boost to tourism, construction, shipping and professional services, with the biggest prize of all going to wholesale and retail trade.
For now, the lack of a solution will continue to act as a drag on competitiveness, productivity and job creation, especially for women and the young, and will leave both communities vulnerable to economic shock, the report says.
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