Cyprus has a record of successful economic performance, reflected in rapid growth, full employment conditions, external and internal stability, almost throughout the post-independence period.

The underdeveloped economy, inherited from Colonial Rule in 1960, has been transformed into, not only a major tourist destination, but also into modern economy offering dynamic services with advanced physical and social infrastructure. Specifically, industrial, agricultural as well as banking and shipping sectors have been rapidly developed.

In terms of per capita income, estimated at CY £9.477 in 2004 (EUR 16,242)*. Cyprus is classified, by the World Bank, among the high income countries. The average annual rate of growth in the past five years was about 3,6%, while average inflation rate stood 2,9% and average unemployment rate at 3,4% over that period.

In addition, Cyprus was ranked 25th in the United Nations 2003 Index of Human Development. Considering other socio-economic indicators such as the excellent housing conditions, pollution free environment, and low crime rate, one may conclude that the quality of life, standard of living and economic performance, position Cyprus favorably among the rest European Union member-states.

The success of Cyprus in the economic sphere is attributed, among other factors, to the adoption of a market-oriented economic system, the pursuance of sound macroeconomic policies by the Government, as well as the existence of a dynamic and flexible entrepreneurial community and a highly educated labour force. Moreover, the economy has benefited from the close cooperation between the public sectors and the social partners.

The basic characteristics of the Cyprus economy are the dominant role of the private sector in production, the small size of the domestic market, the small size of most business units, as well as its open character. Cyprus’s major imports are raw materials, consumer and capital goods, transports equipment and fuel, while major exports are pharmaceutical products, clothing, cement, cigarettes, paper products, plastic products, potatoes, citrus fruit, wines and furniture.

The tertiary sector of services is considered as the backbone of the Cyprus economy (accounting for about 76,3% of GDP in 2004); reflecting the gradual evolution of the economy from an exporter of minerals (mainly copper and asbestos) and agricultural products (citrus) during 1960-73, an exporter of manufacturing products (mainly clothing) at the end of the 1970s, to an international business and service centre in th