The average rate of growth of the G.D.P. during the period 1989-93 reached 5% in real terms, in conformity with the target set in the Plan. However, towards the end of 1992 and during 1993 the economic growth slowed down reflecting the structural problems and the gradual erosion of the competitiveness of the exporting sectors and particularly of manufacturing and tourism.

The Development Plan provided that the main pillar of development would have been the foreign demand for goods and particularly for services offered by Cyprus, taking into account the small size of the domestic market. In actual fact, however, the contribution of foreign demand to development lagged behind expectations. The exports of goods and services expanded by 5,5% in real terms during the period 1989-93, compared to the Plan target of 6,3%. This was attributed to the adverse conditions, faced in export markets due to the prolonged period of recession in European countries, and also to the problem of competitiveness mainly regarding the exports of industrial and agricultural products. A deviation from the target was also observed in tourism, due to the decrease of the per capita expenditure of foreign visitors in real terms, a development which does not conform with the provisions of the Plan for enriching the tourism product and attracting higher income tourists. In contrast, re-exports and exports of services, apart from those linked with tourism, surpassed the target of the Plan, reflecting the enhanced role of Cyprus as a regional transit trade centre and the progress achieved with regard to the attraction of offshore companies.

Source: www.kypros.org