Cyprus in recession; tourism hit

Cyprus’s economy contracted 0.5 percent in the three months to June, its second consecutive negative reading for GDP, data showed yesterday, which means it is technically in recession. GDP growth estimates showed the island’s economy shrank 1.0 percent year-on-year in the second quarter, after a downwardly revised annual growth rate of 0.9 percent in the first quarter. Gross domestic product shrank 0.6 percent quarter-on-quarter in the first three months of the year. Data showing the first quarter year-on-year figure had been revised from 1.2 percent growth became available after the latest quarter-on-quarter figure was released. The statistics department said the hotel and restaurant sectors shrank as well as manufacturing, construction, trade and transport. Visitor numbers to Cyprus fell almost 11 percent in the first half of the year as the global recession led to a slump in British tourist arrivals, the country’s main source of visitors. Finance Minister Charilaos Stavrakis has lowered his prediction for full-year economic growth to about 1 percent from a previous forecast of 2 percent. The European Union says that Cypriot economic growth will slow to 0.3 percent from 3.7 percent in 2008.