In recent years the construction industry has played in a big part in North Cyprus’ developing fortunes. A building boom started in 2002 – 2003 and created an opportunity for foreign buyers to buy up holiday homes at relatively cheap prices – particularly when compared to other parts of Europe – and this helped the economy in North Cyprus enormously. The rate of GDP growth went from 6.9% to 15.4% between 2002 and 2004, giving a good indication of just how much the industry contributed to the country’s fiscal wellbeing.
North Cyprus also manages to get by economically speaking thanks to its main service industries such as tourism, (although projected figures are not good for the next few years thanks to the state of the global economy), and the university based education sector. North Cyprus also has manufacturing sectors which help support the economy, and agriculture still has an important part to play with citrus fruits, potatoes and other vegetables being the main products produced, sold and exported to Turkey for example. The stability of the Turkish lira in recent years has also helped to sustain growth.
North Cyprus sells around half of its exports to countries in the Middle East, but is still fairly dependent on foreign aid, aid programmes and development loans from Turkey. Since the border between the North and South of the island opened in 2003, there has been an increase in the retail sector, mainly clothing related, with Greek Cypriots spending their cash in the North.