Local
articles | 21 October 2015

Cyprus not in need of more financial aid

Cyprus will not need to request any additional financial aid from its international lenders when its bailout program runs out in March 2016, Finance Minister Harris Georgiades said recently.

Cyprus was pulled back from the brink of bankruptcy in a €10 billion (11 billion U.S. dollars) with the Eurogroup and the International Monetary Fund in March 2013.

The eastern Mediterranean island has up to now drawn about €6.0 billion of this but will turn to the international markets to finance its government's operations.

But it may use the remaining €4.0 billion as cheap loan money to repay more expensive loans.

In presenting the 2016 budget to parliament at the start of its debate on Monday, Georgiades said the budget was designed to surpass a 1.8% gross domestic product (GDP) growth.

Cyprus will achieve a more marked sustained growth of up 2 to 2.5% in 2017 and over the next years, after a deep recession which lasted almost three years.

"The most important economic development in 2015 is the end of the most protracted and deep economic contraction in Cyprus' history," said Georgiades.

He said the sovereign debt was sustainable and would become even more so when it dropped to 100% of GDP in 2018.

Source: Famagusta Gazette

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