Cypriot economy is still subject to risks, says Lagarde

IMF Managing Director Christine Lagarde said Cyprus has done a good job of sticking with the program of reforms, stabilizing its financial sector and meeting budget-cutting targets.

She was speaking just after the International Monetary Fund approved the release of the next installment of bailout aid, amounting to $114 million (83.3 million euros) to the island’s troubled economy on Friday.

But Lagarde called on the Cypriot government to speed up the privatization process. “While macroeconomic outcomes have been somewhat better than expected, the economic situation and outlook remain difficult and subject to significant risks,” she said in a statement. “Full and timely implementation of the adjustment program, as well as broad public support, is therefore crucial to restore confidence and growth.”

The IMF’s board said it had also approved Cyprus’s request to modify some performance criteria for the end of December, without specifying further, according to the IMF statement on Friday.