EU forecast shows no light at end of tunnel

EU forecast shows no light at end of tunnel

 

By George Psyllides

The European Commission forecast what it called a ‘profound contraction” in economic activity in Cyprus over the next two years as a result of ‘painful adjustments’ the island must endure under its bailout programme.

According to the Spring forecast published yesterday, the island’s economy is expected to contract by 8.7 per cent this year and 3.9 per cent in 2014 mainly as a result of the conditions of the bailout recently agreed with international lenders, the Commission said.

According to the EC’s spring economic forecast, the island’s real GDP is expected to decline sharply by 8.7 per cent this year “affected in particular by the immediate restructuring of the banking sector, which affects net credit growth, fiscal consolidation, and the high degree of economic uncertainty which weighs on domestic demand and investment.”

Photo Reuters