Despite the poor performance of domestic exports, the economy achieved an average real rate of growth of almost 6% per annum, much higher than the planned target of 4%, basically on the account of the extraordinary performance of tourism. The sectoral pattern of growth was substantially different than planned, as manufacturing output was much below target growth.

More specifically, the tertiary service sectors grew by 7,5% p.a., in real terms during the period 1982-86, compared to 4,6% set in the Plan. Tourism continued to be the dominant sector and its excellent performance had a positive impact on the level of activity in the rest of the services sectors. Manufacturing failed to provide the anticipated impetus to growth, because of problems in the export field, growing by 3,3% per annum, compared with the planned rate of 6,3%.

Gainful employment continued to rise rapidly, by 2,5% per annum - far above target - whilst productivity increased by more than 3%. Nevertheless, unemployment also increased and in 1986 it was 3,7%. Inflation was brought down from 11% in 1981 to 1,2% in 1986.

The progress achieved in the Balance of Payments and in the fiscal sphere was on average less favourable than expected and as a result foreign borrowing and service payments were higher than anticipated. Nevertheless the servicing of foreign debt was low by international standards, at 13% and it did not cause any apparent problems for the economy.

Source: www.kypros.org