Cyprus Mail
BusinessCyprus

Government revises economic, fiscal performance forecast upwards

The finance ministry revised its 2017 forecast for growth marginally upwards to 2.9 per cent and that of fiscal balance considerably upwards to a fiscal surplus of 0.2 per cent of the economy, the finance ministry said.

The economy is expected to expand at the same pace in 2018 with growth slowing down to 2.7 per cent over 2019 and 2020, the finance ministry said in its Stability Programme 2017-2020. In 2018 to 2020, the government expects to generate a fiscal deficit of 0.4 per cent of gross domestic product.

In the draft budgetary plan published in October, the finance ministry was forecasting a 2.8 per cent growth rate for this year accompanied by a fiscal deficit of 0.6 per cent of economic output. Last year, the government generated a fiscal surplus of 0.4 per cent against a forecast of 0.3 per cent
The finance ministry expects to see public debt, which rose to €19.3bn last year, drop as a percentage of economic output from 107.8 per cent in 2016 to 104 per cent this year and 99.7 per cent next year. In 2019 and 2020, debt is projected to decline to 94.6 per cent and 88.8 per cent respectively.

Less than two weeks ago, the International Monetary Fund said that it expected public debt to increase to 109.3 per cent this year and drop below the 100 per cent mark first in 2020.

The finance ministry expects the unemployment rate to drop this year to 11.5 per cent from 13 per cent last year and further to 10 per cent in 2018. In 2019, the jobless rate is expected to drop to 8.5 per cent and 7 per cent in 2019 and 2020 respectively, after remaining in the double-digit area since 2012.

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