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Business Cyprus

EU autumn forecast: modest economic recovery for Cyprus expected to begin in 2015

Cyprus is expected to record a growth rate of 1.6 per cent 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 per cent, and a growth rate of 1.6 per cent in 2016.

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

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

Public debt will reach 107.5 per cent of GDP in 2014.  115.2 per cent in 2015 and 111.6 per cent 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 per cent in 2014. 15.8 per cent in 2015 and 14.8 per cent in 2016.

Inflation is expected to be 0.8 per cent in 2014 and rise to 1.8 per cent in 2015 and 2.5 per cent 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 per cent in the EU and 0.8 per cent in the euro area for 2014 as a whole. Growth is expected to rise slowly in the course of 2015 to 1.5 per cent and 1.1 per cent 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 per cent.

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