Finance Minister Constantinos Petrides said the drop was lower than initially anticipated. GDP expanded by 2.00% compared to the previous quarter (fourth quarter 2020).

Based on this improved performance, Petrides raised estimates for 2021 to growth of 4.5 to 5%, compared to an initial estimate of 3.7%.

CyStat said that according to its flash estimates, GDP in the first quarter of 2021 had contracted by 1.6% over the respective quarter of 2020, negatively affected by a three-week lockdown implemented in January 2021 and other restrictions to contain the spread of the coronavirus pandemic which hampered economic activity.

This was the fourth consecutive quarter that GDP has recorded an annual contraction since the outbreak of the Covid pandemic.

Petrides said that the annual 1.6% drop in GDP was marginally better than the 1.8 per contractions averaged in the Eurozone.

“It is worth noting that in real terms, GDP in the first quarter of 2021 compared to the previous quarter (4^th quarter of 2020) recorded a 2.0% increase, compared to a contraction of 0.6% at Eurozone level. This is the highest increase recorded in the Eurozone, while most European countries continue to have negative rates of growth compared to the previous quarter,” he said.

According to the minister, this shows that the dynamism of the Cyprus economy, the effective handling the pandemic and the government’s support measures bode very positive prospects for the following quarters of the year.

The 1.6% annual contraction in GDP of the first quarter is much improved from the finance ministry’s initial estimate and based on this, Petrides said he was raising initial estimates of 3.7% growth to 4.5 to 5.00%.

“We are convinced that with the dynamism of the economy, the reopening of the market the speedy progress in the vaccination programme and the correct economic management, we will achieve this objective as well.”

Source: Cyprus Mail