BUSINESS

Tourism takes edge off Cyprus recession

Buoyed by tourism income, Cyprus’s recession-hit economy contracted by a slower 0.3 percent in the second quarter, down from the 0.6 percent drop in the previous three months, official figures showed on Wednesday.

Although it was the 12th successive negative quarter for the Mediterranean island’s battered economy, the figures were unchanged from a flash estimate issued on August 14.

It is the slowest rate of decline since the first quarter of 2012.

The latest estimate shows that real GDP, based on seasonally and working day-adjusted data, shrank 2.5 percent in the April-June quarter of 2013.

In January-March the economy contracted 3.9 percent.

International lenders have revised down their contraction forecast for 2014 from 4.8 to 4.2 percent.

The Cyprus economy contracted 5.4 percent in 2013.

Due to high unemployment, hovering at around 17 percent, and a mountain of bad debt, the expected recovery next year has been halved from the initial 0.9 percent lenders predicted to 0.4 percent.

The state statistical service said on Wednesday there were positive growth rates in tourism and trade.

But there was negative growth in many other sectors, including construction, manufacturing, transport and banking.

Tourism has been the one bright spot in the economy, with January-July arrivals up 5.9 percent on last year and revenues improving 8.6 percent in the first five months.

Tourist income accounts for around 10 percent of GDP.

[AFP]

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