articles | 13 May 2016

Cyprus Finance Ministry predicts 2.2% growth in 2016

The Cyprus economy will grow at a rate of 2.2% of GDP in 2016, the Ministry of Finance predicts.

The projection, due to be confirmed by the cabinet was revealed by Finance Minister Harris Georgiades on the sidelines of a conference in London examining the economic and investment outlook for Cyprus.

“Tomorrow the Medium-term Strategic Plan for the economy over the next three years will be submitted, in which the estimate for the economy’s growth rate for this year is expected to be between 2% and 2.5%, more specifically 2.2%,” Georgiades told the press.

The Finance Minister was the keynote speaker at the ‘Cyprus Economic and Investment Summit’ organised on Thursday in the British capital by Eurobank Cyprus, bringing together tens of investors and professionals from private equity firms, hedge funds, sovereign wealth funds, family offices, investment banks and corporate finance specialists.

Speaking to the CNA, Georgiades said that the outlook for Cyprus’ economy was positive: “The economy has been stabilised and has exited the protracted recession; it actually records satisfying growth rates. Therefore, the outlook is positive. But a central prerequisite is to keep up the reform effort, the wise public finances management and the efforts to further enhance the comparative advantages of the Cypriot economy.

“Today’s conference on the economic and investment prospects for Cyprus the dominant message was exactly this; that Cyprus has turned the page and that now the comparative advantages of the country in a wide array of productive sectors are highlighted. What I can assure you is that the government will continue its effort to maintain and enhance these advantages so the country can become an even more attractive destination for local and foreign investments and entrepreneurship.”

In his speech the Finance Minister noted that a “remarkable” economic recovery was underway in Cyprus, which he put down to the “resilience and competitiveness” of key sectors, as well as the “calm and rational” approach of the citizens which allowed the government to implement reforms.He made special references to the fully “reformed and restructured” banking sector which is now based on “stronger foundations” and the successful efforts to control public finances. “Early and decisive action on balancing the budget safeguarded the stability and attractiveness of our tax regime,” said Georgiades.

Asked by the CNA about the high number of non-performing loans over which many investors have expressed concern, the minister said that there was no complacency: “It is an issue we have identified. It a legacy problem stemming from the irrational credit extension of previous years, so there is no complacency. Dealing with this issue will be helped first and foremost by the growth of the real economy and secondly by the systematic efforts of banks, along with borrowers, to have viable restructurings. I am cautiously optimistic that this process has begun and indeed it has already started producing results.”

The conference also examined the advantages of establishing a business base in Cyprus, its regional role and the variety of investment opportunities in financial services, tourism, real estate but also energy healthcare, shipping and maritime clusters, education and research, funds administration and management and airline transportation.

Jonathan Taylor Vice President of the European Investment Bank (EIB) noted in his speech that “the amount of lending activity by EIB in Cyprus clearly demonstrates the enormous confidence on the country’s economy and future.”

Source: Cyprus Mail

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