ECONOMY

In Brief

Cyprus sticks to 2 pct growth forecast for 2009 NICOSIA (Reuters) – Cyprus said yesterday it was sticking to its growth forecast of 2 percent for 2009, but that it would depend on the depth and duration of the global economic crisis and its impact on key business partners. The eastern Mediterranean island, which joined the eurozone in January 2008, also said it expected a shortfall in state finances this year, anticipating a deficit of up to 1 percent of GDP. The island last saw a deficit in 2006. «Our aim of 2 percent growth depends to a great extent on exogenous factors that cannot be predicted. If the world economy deteriorates further, this would drop the expected Cypriot rate of growth,» Finance Minister Charilaos Stavrakis told a news conference. That uncertainty, he said, also clouded growth predictions for 2010. Turkey set to cut taxes to boost consumption Turkey will reduce taxes on new cars and household electronics for three months as it tries to encourage consumer spending, Prime Minister Recep Tayyip Erdogan said. Turkey will also lower the sales tax on new homes to 8 percent from 18 percent for three months and cut five percentage points from a tax on consumer credit, Erdogan said in a televised address from the central Anatolia city of Eskisehir. He didn’t give any figure for the tax reduction on cars or electronics. The prime minister, campaigning for his Justice and Development Party in local elections this month, faces a slowing economy and rising unemployment as the global crisis reduces demand for Turkish-made goods. Output at the country’s carmakers slumped 60 percent in February from a year earlier, the manufacturers’ association said on Wednesday. (Bloomberg) State assistance VAT Ukrgazbank, a Ukrainian lender, has offered to sell a majority stake to the government in a second request by one of the country’s banks for state assistance. Ukrgazbank, based in Kiev, wants to increase its capital by selling shares to the government that would give the state a «50 percent stake plus one share,» the bank said in an e-mailed statement yesterday. «Shareholders have held an emergency meeting, where they took a decision to offer the state a stake,» Chief Executive Officer Vadym Lyashko said in the statement. «We are sure that our initiative will be supported by the government. Preliminary consultations showed that such an option is mutually beneficial,» he said. Ukraine, along with Romania, Hungary and Latvia, was forced to seek a bailout from international financial organizations after the global financial crisis shut off investment, shook the banking system and sent the currency into a tailspin. (Bloomberg) Strong demand Italy’s sale of nearly 7.5 billion euros in government bonds yesterday showed investors’ ongoing zeal for shorter-dated paper but also revealed bidding aggression for peripheral debt from the eurozone’s most indebted country. The results came soon after the Bank of Italy said the third-largest eurozone economy’s public debt as a proportion of gross domestic product rose to 105.8 percent at the end of 2008 from 103.5 percent of GDP at the end of 2007. (Reuters)