Cyprus moves from recovery to growth phase, FinMin says highlighting need for reforms

Cyprus has moved from the recovery to the growth phase as the COVID-19 pandemic subsides, Minister of Finance Constantinos Petrides has said, highlighting the need for the implementation of reforms that would boost the economy’s sustainable growth prospects.

Speaking during an online conference organised by the National Betting Authority, Petrides said that sustainable growth would be achieved through the implementation of reforms and not just by the inflow of EU funds via the Recovery and Resilience Fund.

“We are heading towards the end of the crisis created by the Covid pandemic. Surely 2020 was a very difficult year, a year during which the economy shrank but we are seeing that (…) we have passed the recovery phase and we are advancing to the growth phase,” Petrides said.

Following a downturn of 5.1 per cent in 2020, the Cypriot economy bounced back with an annual 12.9 per cent growth in the second quarter of 2021.

Petrides referred to the latest data showing that the unemployment rate in August 2021 dropped to 4.4 per cent from 8.6 per cent the year before, noting that “this was the largest reduction on a European level.”

He also said that the current forecasts on Cyprus’ growth rate exceed 5.5 per cent for 2021 with great prospects in 2022, “particularly if we utilise the weapons provided by EU Recovery and Resilience Fund and by that I am not only referring to the funds which will flow to the economy for financing infrastructure and projects but reforms as well.”

“Reforms will bring sustainable growth,” he said, adding the government seeks to bring sustainable growth to the wider economy with reforms such as Local Administration, Justice and the public service.

“Cypriots should learn that sustainable growth comes from implementing reforms and not just by the inflow of funds (to the economy),” he said.