As the Euro looks like it will move into depreciation-mode after the ECB rate cut, one thought about a second-degree effect could be on the terms-of-trade. Cyprus has been increasingly exporting (goods) outside the eurozone, especially since 2011. The depreciation will put a nice push on these exports.
We are still concerned that, because Cyprus (small-open-siland economy) depends almost entirely on imports for its inputs, the depreciation will increase, rather that decrease relative prices as it puts pressure on production costs. That aside, exports to non-Ez countries (here a rough proxy including non-EU plus the UK, a makor trade partner) could get a boost.
http://fortheisland.wordpress.com/cyprus-econ-in-numbers/
Δεν υπάρχουν σχόλια:
Δημοσίευση σχολίου