Cyprus’s finance minister said on Tuesday the downturn on the island appeared to have bottomed out, after the economy showed an improvement over the past four quarters.
“The long recession seems to have run its course,” Harris Georgiades told a conference in Nicosia.
Cyprus was pulled from the brink of bankruptcy with a 10 billion euro (7.82 billion pounds) lifeline from the EU and the IMF in March 2013, in a tumultuous bailout which almost decimated the island’s financial sector.
Quarterly data for the past four quarters showed the depth of recession was losing steam, Georgiades said. “There has been stronger than expected resilience of main productive sectors of the economy and confidence has been re-established,” he said.
Georgiades said the bailed-out island expected to achieve a marginal primary fiscal surplus and would exit an excessive deficit procedure two years earlier than scheduled.
Cyprus has previously said it expects a recession this year to be narrower than 3 percent, revised substantially downwards from a contraction close to 4 earlier in the year. The island and its international lenders expect it to return to modest growth of 0.5 percent in 2015.
Unlike other bailout nations, aid to Cyprus was contingent on the island shutting down a major loss-making bank and forcing depositors in another bank to shoulder the cost of recapitalizing the lender by seizing deposits. [Reuters]