10/09/2003 13:21
Growth rate at 2%, unemployment at 3.5%, inflation at 4%, current account deficit at 4.4%, development expenditure at CYP 375 million, public debt of GDP at 63.6%, total public debt including the debts to the Social Security Funds at CYP 2646.5 million, primary balance at CYP 26.5 million or 0.4% in 2003, gross financing needs of GDP at CYP 1050 million or 15.8% and fiscal deficit at 5.3%.
These are the figures included in the State Budget 2004, approved on Tuesday by the Council of Ministers, according to which the prospects for 2003 are positive, due to the improvement in the tourist sector for the second half of 2003, the confidence climate and the expectations of the business world and the consumers.
The additional factors that will promote the Cyprus economy are the supportive measures to boost economic activity, the reduced interest rates and the increased real disposable income of the households, as a result of the drop of the maximum tax rate for the natural persons from 40% to 30% from 1.1.2003.
The growth rate for the first months of 2003 was attributable to the sector of construction and the tertiary sectors of services, excluding the hotel and restaurant sectors and the retail sales sector. The sectors of hotels and restaurants were negatively affected by the decline in tourist arrivals, while the drop in the manufacturing sector is attributable to the decline in the demand abroad and the restraint of the domestic demand.
Unemployment at 3.5%
Unemployment for 2003 is anticipated to reach 3.5% against 3.2% in 2002.
Inflation at 4%
The rate of inflation for the full year 2003 accelerated and is expected to fluctuate to 4%. This increase is attributable to the increase in the VAT from 10% to 13% on 1.7.2002 and from 13% to 15% on 1.1.2003, as well as the increased consumption tax in petrol as from 1.7.2002 and 1.1.2003. The strengthening of the euro against the US dollar and the British sterling, which affected the Cyprus pound, has led to a restraint in the prices of the imported goods. However, core inflation will fluctuate to 2%.
Public debt
Public debt is expected to reach 63.6% of GDP and includes the debts to the Social Security Funds that will amount to CYP 2646.5 million. The primary balance will drop CYP 26.5 million or 0.4%.
Current account deficit
The current account deficit is expected to reach 4.4% for 2003 against 5.3% of GDP in 2002. The improvement of the current account deficit is attributable to the improvement of the terms of trade with the strengthening of the Cyprus pound against the US dollar and the British sterling. On the other hand, the accumulated deficit of the current account declined for January-April 2003 as a result of the restraint of exports.
Financing needs
The gross finaning needs will stand at CYP 1050 million or 15.8% in 2003. According to the forecasts on the disposable finance sources, the cash surplus stands at CYP 160 million. The total public debt will reach CYP 6884.2 million or 103.4% of GDP.
These are the figures included in the State Budget 2004, approved on Tuesday by the Council of Ministers, according to which the prospects for 2003 are positive, due to the improvement in the tourist sector for the second half of 2003, the confidence climate and the expectations of the business world and the consumers.
The additional factors that will promote the Cyprus economy are the supportive measures to boost economic activity, the reduced interest rates and the increased real disposable income of the households, as a result of the drop of the maximum tax rate for the natural persons from 40% to 30% from 1.1.2003.
The growth rate for the first months of 2003 was attributable to the sector of construction and the tertiary sectors of services, excluding the hotel and restaurant sectors and the retail sales sector. The sectors of hotels and restaurants were negatively affected by the decline in tourist arrivals, while the drop in the manufacturing sector is attributable to the decline in the demand abroad and the restraint of the domestic demand.
Unemployment at 3.5%
Unemployment for 2003 is anticipated to reach 3.5% against 3.2% in 2002.
Inflation at 4%
The rate of inflation for the full year 2003 accelerated and is expected to fluctuate to 4%. This increase is attributable to the increase in the VAT from 10% to 13% on 1.7.2002 and from 13% to 15% on 1.1.2003, as well as the increased consumption tax in petrol as from 1.7.2002 and 1.1.2003. The strengthening of the euro against the US dollar and the British sterling, which affected the Cyprus pound, has led to a restraint in the prices of the imported goods. However, core inflation will fluctuate to 2%.
Public debt
Public debt is expected to reach 63.6% of GDP and includes the debts to the Social Security Funds that will amount to CYP 2646.5 million. The primary balance will drop CYP 26.5 million or 0.4%.
Current account deficit
The current account deficit is expected to reach 4.4% for 2003 against 5.3% of GDP in 2002. The improvement of the current account deficit is attributable to the improvement of the terms of trade with the strengthening of the Cyprus pound against the US dollar and the British sterling. On the other hand, the accumulated deficit of the current account declined for January-April 2003 as a result of the restraint of exports.
Financing needs
The gross finaning needs will stand at CYP 1050 million or 15.8% in 2003. According to the forecasts on the disposable finance sources, the cash surplus stands at CYP 160 million. The total public debt will reach CYP 6884.2 million or 103.4% of GDP.
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