ECONOMY

Cyprus slips deeper into recession

NICOSIA – Cyprus’s recession deepened in the fourth quarter of 2014 as gross domestic product shrank by 0.7 percent from the previous three-month period, official data showed on Friday.

The Mediterranean island suffered a 14th successive quarterly economic contraction, according to a flash estimate from the state statistical service. It was the steepest fall in more than a year and followed a third quarter decline of 0.3 percent.

Real GDP, based on seasonally and working-day adjusted data, shrank 1.9 percent in the fourth quarter from a year earlier. In July-September the economy contracted 1.8 percent year-on-year.

The European Commission in November cut its 2015 economic growth forecast for Cyprus to 0.4 percent, from a previous estimate 0.9 percent, due to high unemployment and bad debt.

The state statistical service said on Friday there were positive growth rates in hotels, restaurants, legal and accounting services and trade in the fourth quarter. But there was a contraction in many other sectors including construction, manufacturing, transport, banking and other services.

The troika of international lenders – the European Commission, the European Central Bank and the International Monetary Fund – bailed out Cyprus in March 2013 to prevent a banking collapse. In return Cyprus agreed to a harsh austerity program.

[AFP]