Figures released in November 2012 show that the Cypriot economy experienced negative growth of 2.3% in the third quarter of 2012 compared to the same quarter in 2011. Inflation stands at 1.7%. The island’s economy has suffered since an explosion at the Evangelos Florakis Naval Base in July 2011, which is located next to Cyprus’s main electricity power station. It is listed as being the 7th largest non-nuclear explosions to have occurred in the world. The electricity station has had to be rebuilt, with the expected final cost to the island of around US$2.83 billion.
Cyprus’s market economy is dominated by its service sector, which accounts for around four fifths of the economy. While tourism remains a mainstay of the Cypriot economy, the industry has also been affected by the recent global economic downturn. Tourist arrivals stood at nearly 2.4 million to December 2011 compared with 2.17 million to December 2010.
The Republic of Cyprus is a full member of the European Union, however negotiations are ongoing for membership to include the internationally unrecognised territory of north Cyprus. The area north of the Green Line depends heavily on tourism and the service industry to form the backbone of its economy and remains heavily reliant on the mainland Turkish economy for support.
Many of the upmarket hotels have conference facilities. Nicosia is a popular destination for budget-priced conferences and has modern facilities. Larnaca, Paphos and Limassol have a number of 5-star hotels with excellent conference and incentive facilities in what is very much a growing market. Advice can be obtained from the Cyprus Tourism Organisation.