Last year, the current account gap narrowed mainly on increased primary income, the difference of income paid to Cypriot investors from investment abroad and the income paid to foreign investors from Cyprus, which rose last year to minus €62.5m from minus €637.2m in 2014, the central bank said in a statement on its website on Monday. “Primary income receipts increased marginally to €4.6bn in 2015, mainly due to increases in ‘other’ investment and portfolio investment income receipts. In contrast, there was a decrease in income payments during the reference year, from €5bn in 2014 to €4.6bn in 2015”.

The narrower primary income balance more than offset a widening of the trade balance shortfall to €3.2bn last year, from €2.8bn in 2014, the central bank said. The trade balance in services rose to by €54m to over €3.2bn. The balance of secondary income, which includes net remittances and net transfer of funds to and from the European Union, was minus €510.6m last year, compared with €484.1m in 2014.

The balance of payments deficit fell from a 2008 peak of €2.9bn or 16% of the economy, the bank supervisor said. “The main cause of the reduction in the deficit over the period 2008-2015 was, primarily, the improvement in the trade balance in goods and, to a lesser extent, the improvement in the primary income balance,” it added.

Source: Cyprus Mail