articles | 05 November 2014

EU predicts Cyprus exit from recession in 2015

Cyprus is expected to record a growth rate of 1.6% in 2016 according to the European Commission's Autumn Economic forecast.

The forecast for Cyprus notes that the country will exit recession in 2015, with a growth rate of 0.4%, and a growth rate of 1.6% in 2016.

GDP will drop by 2.8% in 2014, which is a forecast must more positive than the Spring forecast of 4.8%.

Public deficit in 2014 will be 2.8% of GDP (the forecast in Spring was 5.8%). In 2015 public deficit is expected to be 3.0% and 1.4% in 2016.

Public debt will reach 107.5% of GDP in 2014.  115.2% in 2015 and 111.6% in 2016. It is noted that the forecast is better than the one in Spring.

The unemployment rate is also expected to drop, reaching 16.2% in 2014. 15.8% in 2015 and 14.8% in 2016.

Inflation is expected to be 0.8% in 2014 and rise to 1.8% in 2015 and 2.5% in 2016.

The European Commission’s autumn forecast projects weak economic growth for the rest of this year in both the EU and the euro area. Real GDP growth is expected to reach 1.3% in the EU and 0.8% in the euro area for 2014 as a whole. Growth is expected to rise slowly in the course of 2015 to 1.5% and 1.1% respectively on the back of improving foreign and domestic demand.

Meanwhile, the House committee on finance discussed the state budget, and according to the government. 2014 will close with marginal primary surplus and fiscal deficit is expected to be 2.5%.

Source: Cyprus Mail

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