ECONOMY

In Brief

Cypriot economy seen showing zero growth The economy of Cyprus, the euro area’s second smallest, is expected to have zero growth this year and may actually contract, Bernard Laurens, deputy division chief of the International Monetary Fund’s European Department, said. Cyprus may have a «modest» recovery in 2011, while the budget deficit should be about 6 percent of gross domestic product this year after the government took «important first steps» to cut the number of public workers, Laurens said at a press conference in Nicosia yesterday. «The foremost policy challenge for Cyprus is to reverse the large structural fiscal deficit that has emerged in recent years and bold measures are required» to achieve a government target of below 3 percent of GDP by 2012, Laurens said. The government should focus more on curbing the wages of public workers, which grew faster than salaries in the private sector in recent years, and on restructuring civil service pensions to reduce expenditure, he said. Cyprus’s budget deficit stood at 6.1 percent of GDP in 2009 compared with a surplus of 0.9 percent of GDP in 2008. (Bloomberg) Bulgaria plans new pipeline with Greece SOFIA (Reuters) – Bulgaria plans to overcome its overwhelming dependence on Russian energy by building new gas pipeline links with neighboring Greece, Romania, Turkey and Serbia, a draft energy strategy showed yesterday. It is also seeking Western investors for a planned new nuclear power plant at Belene and aims to fight climate change more effectively as well as improving energy efficiency. «Bulgaria secures 70 percent of its gross energy consumption from imports. The dependence on imports of natural gas, crude oil and nuclear fuel… is traditionally linked with the Russian Federation,» the strategy up to 2020 said. Sofia plans to have the new gas links ready by 2013, which will allow supplies of Azeri gas to Bulgaria, as well as shipments of liquefied natural gas (LNG) from producers such as Algeria, Egypt, Oman and Nigeria. It will also work toward building a new LNG terminal in northern Greece and negotiate the delivery of compressed natural gas by tankers through the Black Sea from Azerbaijan, the plan, expected to be approved next month, said. The center-right government, which has put on hold the building of a new 2,000-megawatt Belene nuclear power project, said it will support nuclear energy but indicated it will not invest in it. Romanian inflation Romanian inflation is set to accelerate this year to 8.0 percent, more than double an initial forecast of 3.5 percent, central bank Governor Mugur Isarescu said yesterday. «According to the latest estimates on Friday and confirmed yesterday, we will finish the year with an 8 percent inflation rate,» Isarescu said, quoted by news agency Mediafax. The new forecast comes five days after the center-right government of Emil Boc raised value-added sales tax from 19 to 24 percent to try to curb a rising public deficit. (AFP) Building permits The number of building permits issued on Cyprus fell an annual 2.8 percent in April after rising on a yearly basis the previous two months, the Cyprus Statistical Service said yesterday in a statement on its website. The total number of permits issued, an indicator of future construction, dropped to 668 from 687 in the same month last year, the service said. «The downward movement in April was seasonal, although no one should believe that any increase in building permits would result in more construction, as there is weak demand from foreign buyers,» Lakis Tofarides, president of the Cyprus Land and Building Developers Association, said in a telephone interview in Nicosia yesterday. (Bloomberg) Port traffic Thessaloniki Port Authority SA, the operator of Greece’s second-biggest port, said it cut service prices on July 1 for container and cruise ship operations by 20 percent in a bid to boost traffic at the northern harbor. The move aims to attract new container traffic destined for Balkan markets, reattract container cargoes that moved to competing ports in Southeast Europe and to attract cruise ship lines, the authority said today in a statement. The Thessaloniki port handled 107,789 containers in the first five months of the year, 4.8 percent more than the same period last year, it said. (Bloomberg)