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FinMin: Cyprus' economy to shrink by 5.5% in 2020

30/09/2020 09:29

The Cypriot economy is expected to shrink by 5.5% in 2020 compared to a 7% reduction which was the main scenario of the government, the Minister of Finance Constantinos Petrides said, speaking at a virtual event organized by Economist titled "The New York - East Med Summit: A sea of conflict or a sea of opportunities».

Petrides said that the Government has revised downwards its forecasts for contraction of the economy, as well as the forecasts for unemployment, which is expected to rise to 8% from 9% projected for 2020.

He also said that in 2021 a significant rebound of the economy is expected by about 4.5% to 5%, despite the uncertainty, adding that the timely measures taken by the government in relation to the pandemic seem to work and that the consumption indicators are positive. He added that Cyprus has offered one of the most comprehensive packages at EU level.

Furthermore, he noted that the budget deficit is expected to be around 4.5% and the debt, which is currently at 120%, is expected to follow a downward trend by the end of the year.

Referring to the recovery strategy, he said that it is based on three pillars. These are the maintenance of macroeconomic stability, the continuation of the effort to reduce non-performing loans and the continuation of the effort for structural reforms in order to strengthen the investment framework of Cyprus. He also said that Cyprus has comparative advantages as an investment destination and there are investment opportunities in various sectors.