The economy in the northern part of the island differs considerably from the economy of the Republic of Cyprus since, among other reasons, the economic ties between the two sides are small.
Economic growth rates in the Republic of Cyprus (2.9%) may be lower than those in the north (4.5%), and the unemployment significantly higher, however, the per capita income is much higher in the Republic of Cyprus. Per capita GDP in the north according to 2015 data is 58% of that in the Republic of Cyprus.
Meanwhile, the dependency of the economy in the north on Turkey is very extensive, with “governmental” structures being maintained due to the financial help from Turkey. The data for the economy in the north between the period 2010-2015 will be cited from Lecturer in Turkish-Middle Eastern Studies, Nicos Moudouros.
According to Moudouros, the TC economy, which is reliant on Turkish sponsorship and tourism, has been developing these past few years with a more rapid pace. In fact, during 2014, the growth rate touched 5%, while in 2015 it reached 4.5% During 2012 and 2013, the growth rate was lower (0.5% and 1.3% respectively). Moudouros notes that the economy in the north in 2016 is stalling, with lower growth rates expected.
According to the data, the GDP for 2015 reached $3.61 billion, lower than 2010 when it was estimated at $3.75 billion. In 2014, however, GDP surpassed $4.03 billion. In 2011 the GDP was at $3.9 billion, $3.84 billion in 2012, and $3.96 billion in 2013.
Meanwhile inflation is quite high at 7.8% in 2015, while the devaluation of the Turkish lira is damaging to those with lower incomes. Unemployment is steadily at 8% since 2012.
The balance of external trade remains negative, since imports greatly surpass the value of exports. This is indicative of the extensive dependency of the north to Turkey, since the majority of imports come from Turkey.
In 2015 the trade deficit reached $1,719 million as imports reached $1,861 million and exports $141.5 million.
As for the per capita income of the average resident in the north, it reached $13,457 in 2015, compared to $15,109 in the previous year and $15,032 in 2013, while the best year was 2011 with per capita income reaching $15,404.
A significant source of revenue for the north is tourism, with the number of tourists visiting increasing during the past five years. 902.4 thousand tourists visited in 2010, while in 2015 1.5 million tourists visited the north, the majority of which (1.1 million) came from Turkey.