Economy of North Cyprus

Liberal economic system has been adopted in the TRNC. Under this system the promotion of the private sector with limited government intervention, the rational use of natural resources, the encouragement of investments that generate high value added and employment preserve their priority and importance.

The Gross National Product has been 651,380,055 million TL (1,039.9 US$ million) at current prices of 2000. In terms of their contribution to GNP the four most important sectors are public services, trade-tourism, transport- communication and industry. The shares of these sectors in GDP have been 16.4%, 16.4%, 12.3% and 12.2% respectively in the year 2000. The share of agriculture was 7.9% for the same year.

GNP per capita has been 4,978 US$ in 2000 which indicates that the TRNC is in the category of middle income country group.

The TRNC has a well trained work force. The educational system of high standarts in the TRNC aims to develop the abilities of all individuals. There are 13 technical and vocational high schools and 8 higher education institutions. Five of these higher education institutions offer instruction in English. The working population was 89,327 in 2000 which constituted 42.7% of the total population. According to the sectoral distribution of the working population, public services occupied the biggest share which was 20.2% of the total employment in 2000. The share of the other sectors in total employment in 2000 were as follows; agriculture 17.1%, construction 15.8%, business and personal services 14.6%, trade-tourism 10.8%, industry 9.7%, transport-communication 9.1% and financial institutions 2.7%. There isn't acute unemployment in the TRNC. The official unemployment rate has been 1.6% for the year 2000.

The rate of inflation in the TRNC is measured by the Retail Price Index which is based on the results of Household Consumption Expenditure Survey. The last survey was conducted in the years 1998-1999 and was introduced as from January 2001. Changes in the indices show that a high rate of inflation has been prevailing in the TRNC. The changes in Retail Price Index for the years 1998, 1999 and 2000 have been 66.5%, 55.3% and 53.2% respectively.

The economy of the TRNC has the peculiarities of an island economy with limited resources so foreign trade emerges as the major sector of the economy. The TRNC has adopted a liberal trade policy and practices no discrimination against any foreign country. She has established trade relations with more than 60 countries all over the world. The volume of foreign trade has been 475.3 million US$ of which 89.4% constituted the total imports in the year 2000. Export earnings met only 11.9% of the total imports and the trade deficit realized as 374.5 million US$ in 2000.

The export shares of the main groups in total exports are as follows: ready- made clothing 38.3%; citrus fruit 26.6%; processed agricultural products 24.2%. The import shares of the leading groups in total are as follows: machinery and transport equipment 29.6%; manufactured goods classified mainly by materials 21.4%; food and live animals 14.3%; mineral fuels, lubricants and related materials 10.5%; chemicals 8.2%.