Contribution of shipping to Cyprus GDP
The shipping industry pumped a staggering 623 million euros into the real economy of Cyprus last year, solely through ship management.
Cyprus’ shipping industry plays a vital role, constituting 7% of the nation’s GDP. A recent Moody’s report indicates a substantial 75% surge in international shipping earnings in 2023 compared to 2019, attributed in part to pandemic-induced challenges and heightened demand for sea-imported goods. Despite minor declines, economic data in Cyprus remains resilient. Ship management revenues for the first half of 2023 reached €623 million.
Foreign companies with a physical presence in Cyprus, particularly from Germany (40%), Greece (17%), Switzerland (10%), Malta (5%), and Singapore (4%), contribute significantly. Notably, these contribution rates are expected to persist in 2024. Large shipping companies dominate, contributing 94% of the industry’s revenues in the first half 2023, with ship management firms representing 46% of total ship revenues.
The Deputy Ministry of Shipping contributes to domestic revenues through ship registrations and the tonnage tax system. Despite the complexities stemming from global issues like the pandemic, sanctions against Russia, the Israel war, and Houthi activity, the State Department’s 2021 revenues were €16.44 million, decreasing slightly in 2022.
Cyprus remains a robust ship management hub, with a 7% GDP contribution, attracting foreign direct investment. The Cypriot flag’s qualitative attributes drive shipowners to register vessels, with the industry serving as a lasting foreign investment. Cyprus Chamber of Shipping Director Thomas Kazakos highlights the industry’s credibility, attracting companies from various sectors.
Beyond bolstering state coffers, ship management fortifies the local economy, with Limassol hosting 9,000 maritime professionals. The industry’s international workforce contributes to local sectors like property rental and the automotive market. Member companies employ around 80,000 to 90,000 seafarers on 2,600 oceangoing vessels. Despite the Turkish embargo, Cyprus boasts the EU’s third-largest fleet and the world’s 11th-largest.
BIMCO’s analysis projects a 0.5-1.5% rise in cargo demand and a 2-3% increase in oil product demand in 2023.
