The Central Bank of Cyprus (CBC) reported a substantial deterioration in Cyprus' current account balance for 2023, with the deficit escalating to €3.61 billion, equivalent to 12.1% of the island’s GDP.

The preliminary balance of payments data for 2023, as released by the CBC, shows an annual increase of 64% in the current deficit, up from €2.20 billion in 2023, or 7.9% of Cyprus’ GDP.

When adjusted for the impact of Special Purpose Entities (SPEs), considering them as non-Cypriot residents, the deficit stood at €3.43 billion in 2023. This figure compares with a deficit of €2.54 billion in 2022, representing 11.5% and 9.2% of the country's annual GDP, respectively.

Furthermore, Cyprus' international investment position (IIP) recorded a deterioration in 2023, showing a net liability position of €28.74 billion, an increase from €26.71 billion in 2022.

After adjustments for SPEs, Cyprus' IIP still indicates a significant net liability position of €10.85 billion in 2023, up from €9.36 billion in 2022.

The gross external debt of Cyprus escalated to €171.7 billion in 2023, a rise from €169.3 billion in 2022.

The CBC notes that external assets in debt instruments saw an increase to €154.6 billion in 2023, up from €147.4 billion in 2022.

As a result, the net external debt saw a decrease of €4.9 billion, landing at €17.1 billion in 2023.

When considering the impact of SPEs, the gross external debt amounted to €58.4 billion in 2023, compared to €58.4 billion in 2022. Correspondingly, the net external debt indicator decreased to -€15.1 billion in 2023, from -€11.9 billion in 2022, as stated by the CBC.