07/12/2001 11:49
Upon calculating the Cost of Living Index for November, the Ministry of Finance announced that inflation for 2001, based on data which include November, shows a significant drop of just 1.9% compared to 4.2% the corresponding period last year. Inflation for the current year is expected to be in line with projections not to exceed 2%.
Concerning the Growth Rates, the Cyprus economy for 2001 had initially been expected to grow by an average 4%. This was revised mid-year to around 4.5% but due to the tragic events of the 11 September, projections have been reviewed and again the average growth rate of the economy was expected to be contained to 3.5%. Recent indications however appear to confirm that the average growth rte for 2001 will not show a significant slow-down as had been anticipated but will range close to initial projections of around 3.5-3.8%.
Towards growth of the economy, a vital role was played by increase of consumer spending as well as the increases noted in investment activities. Over the first eight months of the year, the consumer price index rose in real terms by 6%. Imports of machinery utilized for investments over the same period also show a significant rise of 21%. Projections of the Ministry for 2002 show that growth rates will continue at a lower pace compared to previous periods to around 3% in real terms, compared to 1.4% in the EU due to the negative effect of events of the 11 September on tourism.
Concerning unemployment, the satisfactory performance of the Cyprus economy is also reflected in the labour market showing favourable employment conditions. Unemployment, according to the traditional method of calculation, that is the number of registered unemployed persons at regional employment offices, will show a decrease down to 3% compared with 3.4% the previous year. If unemployment is calculated based on methods used in the EU, again a decrease results.
On Public Deficit, the Ministry of Finance initially anticipated this to be around 2.6% of Gross Domestic Product but developments of the 11 September could affect Public Deficit negatively but not beyond Maastricht directives. Revised projections of the Ministry based on data up to September 2001 show that both Public Deficit for 2001 as well as Public Debt will remain below 3% and 60% of GDP respectively, being in line with Maastricht directives.
Concerning the Growth Rates, the Cyprus economy for 2001 had initially been expected to grow by an average 4%. This was revised mid-year to around 4.5% but due to the tragic events of the 11 September, projections have been reviewed and again the average growth rate of the economy was expected to be contained to 3.5%. Recent indications however appear to confirm that the average growth rte for 2001 will not show a significant slow-down as had been anticipated but will range close to initial projections of around 3.5-3.8%.
Towards growth of the economy, a vital role was played by increase of consumer spending as well as the increases noted in investment activities. Over the first eight months of the year, the consumer price index rose in real terms by 6%. Imports of machinery utilized for investments over the same period also show a significant rise of 21%. Projections of the Ministry for 2002 show that growth rates will continue at a lower pace compared to previous periods to around 3% in real terms, compared to 1.4% in the EU due to the negative effect of events of the 11 September on tourism.
Concerning unemployment, the satisfactory performance of the Cyprus economy is also reflected in the labour market showing favourable employment conditions. Unemployment, according to the traditional method of calculation, that is the number of registered unemployed persons at regional employment offices, will show a decrease down to 3% compared with 3.4% the previous year. If unemployment is calculated based on methods used in the EU, again a decrease results.
On Public Deficit, the Ministry of Finance initially anticipated this to be around 2.6% of Gross Domestic Product but developments of the 11 September could affect Public Deficit negatively but not beyond Maastricht directives. Revised projections of the Ministry based on data up to September 2001 show that both Public Deficit for 2001 as well as Public Debt will remain below 3% and 60% of GDP respectively, being in line with Maastricht directives.
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