01/06/2004 15:07
A recent Finance Ministry confidential report on economy left the possibility open that the fiscal deficit might reach 6.9% of GDP in 2004 against 6.3% in 2003 (Finance Ministry estimates at 4.2% of GDP), unless the government takes the proper measures for a fiscal consolidation. This possibility would urge the EU to reject Cyprus’ application for an ERM2 entry “with unfavourable economic and political prolongations”. Cyprus will also have no access to the EU Cohesion Fund, as well as to loans from the Central Investment Bank.
According to the report, the ECOFIN is expected to urge the Cyprus government to reduce its fiscal deficit below 3%. If government fails to take the proper measures, fiscal deficit will reach £480 million (6.9% of GDP) and will continue its upward trend to £685 million (8.2% of GDP) in 2007. On the other hand, the proper measures will drop fiscal deficit to £388 million (5.6% of GDP) and £135 million (1.5% of GDP) in 2007.
StockWatch sources reveal that the Cohesion Fund will finance “great infrastructure projects”, such as the construction of an additional lane to the Nicosia – Limassol highway.
According to the report, the ECOFIN is expected to urge the Cyprus government to reduce its fiscal deficit below 3%. If government fails to take the proper measures, fiscal deficit will reach £480 million (6.9% of GDP) and will continue its upward trend to £685 million (8.2% of GDP) in 2007. On the other hand, the proper measures will drop fiscal deficit to £388 million (5.6% of GDP) and £135 million (1.5% of GDP) in 2007.
StockWatch sources reveal that the Cohesion Fund will finance “great infrastructure projects”, such as the construction of an additional lane to the Nicosia – Limassol highway.
Related Articles
