ECONOMY

In Brief

Cyprus announces broad tax cuts in tourism NICOSIA (Reuters) – Cyprus announced wide-ranging tax cuts in the tourism sector to try and stave off an economic slowdown expected to hit bookings to the Mediterranean island this year. The tourism industry, which represents some 10.6 percent of Cyprus’s gross domestic product, has warned bookings could fall by 20 percent in 2009. Cyprus is heavily reliant on the British market, which has been particularly affected by the credit crunch. Authorities said they planned to cut the value-added tax charged by hotels for overnight stays to 5.0 percent, from the present 8.0 percent. «Naturally, we would expect that this will push down the cost of packages to Cyprus,» said Cypriot President Dimitris Christofias, who announced the aid measures. The state, he said, would also forfeit part of the government’s earnings from airport landing fees and encourage domestic tourism through subsidies. Turk inflation dip could mean lower interest rate Turkish inflation eased in January to its slowest in 10 months, opening the way for further cuts to the benchmark interest rate. Annual inflation slowed to 9.5 percent from 10.1 percent the month before, the statistics office in Ankara said on its website yesterday. Prices were expected to rise 9.4 percent, according to the median estimate of 13 economists surveyed by Bloomberg. In the month, prices increased 0.3 percent. Falling commodity costs and the global crisis, which is depressing demand in Turkey, are helping to slow inflation. The central bank has reduced the benchmark interest rate by 3.75 percentage points in the last three months, taking it to a record 13 percent, and there’s room for additional cuts, Governor Durmus Yilmaz said on January 26. The figures «support a 50-basis-point cut from the central bank this month,» said Yarkin Cebeci, economist for JPMorgan Chase & Co in Istanbul. «It’s in line with weakening demand and demonstrates that the pass-through effect of the weaker lira has been very moderate.» (Bloomberg) Software sales Globo Plc, a Greece-focused provider of telecom software, said yesterday it expected a 35 percent jump in 2008 pretax profits, broadly in line with market estimates, helped by strong trading across the group. However, the company expects only «small growth» in 2009 profit, as gross margins are likely to be hit by the more «cost-conscious environment.» «The board considers it prudent to expect that revenue growth, while still significant, will be somewhat lower than previous expectations,» it said in a statement. Revenue for the year ended December 31, 2008, was more than 17 million euros ($21.88 million), up 60 percent from the previous year. (Reuters) Credit transactions Credit card transactions in Cyprus rose 21 percent year-on-year in January, data showed yesterday. Sales on credit cards in January reached 184.2 million euros, clearing agency JCC said yesterday. Government-related payments formed the bulk of transactions, representing 24.7 percent of sales volumes, followed by supermarket bills at 17.6 percent and clothing retailers at 14.4 percent. Tourist spending by credit card dropped 19 percent to 17.9 million euros. (Reuters)