Cyprus Economy Cyprus economy has yet to hit bottom say economists
Cyprus economy has yet to hit bottom say economists
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The recession in Cyprus’ economy in 2012 will be deeper than expected, according to economists from the Economic Research Centre of the University of Cyprus.
The economists believe that following a slight increase of 0.5% in 2011, the Cyprus economy will shrink by 1.5% – 2% in 2012.
They noted that challenges are big and uncertainty is significant.
The council of experts is composed of M. Clerides, P. Pasiardis, Chr. Pissarides, M. Sarris and L. Christofides.
The forecast does not include the VAT increase from 15% to 17%, which may add at least half percentage point to inflation in 2012.
According to the survey, the current condition of the global economy and the uncertain future of the euro area have increased dramatically the risks for the Cyprus economy.
The necessary fiscal adjustment and measures decided by government and Parliament, admittedly belatedly, have changed the data for 2012. On the one hand, they have improved the fiscal condition of the economy, but on the other hand, they deteriorate the economic condition of households in the short term, pushing their available income down.
As for the external environment, it has worsened and will possibly affect growth prospects in 2012.
The economists believe that the negative risks are greater than the positive and that the economy will be largely affected in 2012.
(source: www.news.cyprus-property-buyers.com)
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