Bailed-out Greek Cyprus posts GDP growth

NICOSIA - Agence France-Presse

Greek Cypriot banking system is largely affected by ecomonic burdens. REUTERS Photo

Eurozone member Greek Cyprus is well out of recession, having notched up a third consecutive quarter of growth, and is looking for GDP to expand at least 1.5 percent this year, officials have said.

The economy grew a seasonally adjusted 0.5 percent in the third quarter, the same as in the previous three months and following 1.3 percent in the first quarter, the statistical service said.

Two consecutive periods of quarter-on-quarter growth indicate than an economy has officially exited recession.

Moreover, third-quarter growth was up 2.2 percent on the year-earlier period, and 0.6 percent in the second quarter.

The figures showed third-quarter growth in manufacturing, trade, hotels and restaurants, as well as transport, technology and financial services.

However, there was a contraction in sporting, social and cultural activity and the employment of home help.

Greek Cyprus has suffered from more than three years of economic slowdown with the government having imposed harsh austerity measures in exchange for a European Union-International Monetary Fund bailout.

Meanwhile, Finance Minister Harris Georgiades said “we have confirmation of our estimate that 2015 will have a growth rate that will reach and maybe exceed 1.5 percent.” 

Georgiades told reporters. “Our efforts show that the real economy is starting to move, but we must continue with the same effort,” he added in remarks to reporters.

“We have to strengthen growth prospects and this requires that reforms are continued.” 

In return for 10 billion euros ($13 billion at the time), Greek Cyprus agreed in March 2013 to wind down its second-largest bank, Laiki, and impose losses on depositors in under-capitalized top lender Bank of Cyprus.

It also agreed to the harsh austerity measures.

The government aims to exit from the bailout program in 2016 after recording positive economic growth this year.

Georgiades said the international lenders have “successfully completed” their eighth review of the economy, which will most probably be their last before Nicosia exits the program in March.