ECONOMY

In Brief

Paphos mayor calls for boycott of Cyprus Airways The mayor of the city of Paphos in southwestern Cyprus, Savvas Vergas, yesterday called on all citizens in the province of Paphos to stop using national carrier Cyprus Airways to travel. Speaking at a press conference, Vergas expressed his and city organizations’ displeasure at a recent decision by the airline’s governing board, which provides for the termination of the company’s sole flight linking Paphos International Airport with Athens. The Paphos mayor called on residents to choose other companies that operate from Paphos Airport instead when booking flights. Cyprus Airways issued a statement in response to the press conference expressing its surprise and disappointment. The carrier added that «the condition of the company does not allow for the continuation of the existing flight schedule without the specific alterations required.» The airline said it expects the people of Paphos to show their understanding and «support the company in its difficult struggle for survival.» Turk December inflation slowed to 6.4 percent Turkey’s inflation rate fell to a year-low in December, making it more likely the central bank will reduce interest rates further. Consumer prices rose 6.4 percent from a year ago, after advancing 7.3 percent in November, the statistics office in Ankara said on its website yesterday. Economists expected an increase of 6.8 percent, according to the median of five estimates in a Bloomberg News survey. Prices fell 0.3 percent from a month ago. Central bank Governor Durmus Yilmaz has been trying to balance the demands of exporters, who are calling for cuts in the key rate to help slow inflows of foreign currency that may strengthen the lira, with the need to ease surging domestic demand. The bank on December 16 reduced the benchmark interest rate to a historic low of 6.5 percent and increased the amount lenders have to set aside against loans. It said the net impact was a tighter monetary policy. «The bank is trying to make policy looser externally to discourage speculative inflows while tightening from the domestic perspective,» Inan Demir, chief economist at Finansbank AS in Istanbul, said in a telephone interview. «It would be difficult for the bank to convince markets of the need for it if inflation were increasing.» Gross domestic product grew 5.5 percent in the third quarter of the year from the same period a year ago, largely fueled by domestic consumption, following a 10.2 percent jump in the three months through June. The economic expansion in 2010 probably exceeded the government’s 6.8 percent forecast and was among the fastest in Europe, Deputy Prime Minister Ali Babacan said last month. (Bloomberg) Croatian growth Croatia’s recession-hit economy expanded for the first time since late 2008, as it grew by 0.2 percent in the third quarter of 2010 from the same period a year earlier, official data showed yesterday. Households’ consumption, the largest component of gross domestic product, increased by 1.9 percent, a national statistics bureau statement said. At the same time government consumption decreased by 0.9 percent, it added. Croatia last recorded GDP growth in the final quarter of 2008. The central bank estimates that the country’s economy will shrink 1.9 percent in 2010 following a 5.8 percent contraction a year earlier. The European Union-aspirant country’s 2011 budget is based on a forecast of 1.5 percent growth and a public deficit of 4.3 percent of GDP. (AFP) Transelectrica Romanian grid operator Transelectrica SA’s 10 percent price increase will boost revenue and halt declining profits, CEO Stelian Gal said yesterday. The state-owned company received permission to raise its regulated distribution fees more than expected to 18.77 lei ($5.80) per megawatt-hour from 17 lei, according to a statement published on the National Energy Regulator’s website. (Bloomberg)