DBRS, the Canadian rating agency, has marginally downgraded its 2024 growth forecast for the Cypriot economy to 2.4%, a slight reduction from the 2.5% projection made last December. However, it significantly upgraded the 2025 growth estimate to 2.4%, from the previously anticipated 2.0%.

According to the agency's updated March 2024 assessments of evaluated economies, unemployment in Cyprus is expected to further decrease to 6.1%, down from the 6.4% forecast last December. In 2025, unemployment is expected to remain at 6.1%, compared to the 6.2% projected in December.

Globally, DBRS continues to see "some downward risks for the global economy, including the escalation of geopolitical tensions, electoral uncertainty (particularly in the USA), and increasing damages from commercial properties." However, with inflation easing, most central banks have room to reduce interest rates if adverse demand disruptions occur.

In detail, the Canadian firm notes that expectations for US growth have improved significantly since last December, now forecasting 2.1% for 2024, a notable upgrade from the weak median forecast of 0.6% just six months ago.

Other major economies have seen only moderate changes in forecasts, with Europe expected to remain in weak growth, below 1% for 2024 (excluding Spain and several other smaller eurozone economies). Revisions within Europe have been mixed but slightly negative for the larger economies (Germany, France, and the United Kingdom) for 2024.

DBRS estimates Germany to grow by just 0.1% in 2024 (down from the 0.4% forecast in December 2023) and 1.1% in 2025, while France's growth is projected at 0.7% for 2024 (down from 0.8%) and 1.3% for 2025.

The agency expects Greece to grow by 1.5% in 2024 (up from 1.3% in the previous estimate) and 2.3% in 2025 (up from 2%).

Furthermore, growth in Japan has been revised downwards to 0.7% in 2024 and 1.1% in 2025, while Chinese growth is estimated at 4.6% for 2024 and 4.4% for 2025.

Excluding the USA, which is expected to slow down, most major economies are projected to experience stronger growth in 2025, emphasizes DBRS.