0% growth in 2015, says Fis­cal Coun­cil

Financial Mirror (Cyprus) - - FRONT PAGE -

The econ­omy is ex­pected to record a flat growth rate of 0% next year, ac­cord­ing to the Fis­cal Coun­cil, which notes that the as­sump­tions used by the Fi­nance Min­istry in draft­ing the 2015 state bud­get are “ac­cept­able”.

How­ever, Coun­cil Pres­i­dent Demetris Ge­or­giades called on the Fi­nance Min­istry to be pre­pared to take the nec­es­sary mea­sures if needed, as the cur­rent pro­jec­tions may change.

The Troika of in­ter­na­tional lenders re­vised up their es­ti­mate of a neg­a­tive growth of 0.4% of GDP, up from -0.9% seen ear­lier.

“The Fis­cal Coun­cil an­nounces that the GDP growth rate for 2015 is ex­pected around 0% with a pos­si­bil­ity for a small in­crease,” the Coun­cil said.

It added that the pro­jec­tions used by the Fi­nance Min­istry in draft­ing the state bud­get for 2015 “are within the ac­cept­able lim­its.”

Fur­ther­more, the Coun­cil also said it be­lieves that the econ­omy will con­tinue to con­tract in 2014 al­beit at a smaller rate than the Troika pro­jec­tions, due to higher pri­vate con­sump­tion.

Ac­cord­ing to the Troika, the econ­omy in 2014 will con­tract with a rate of -4.2%, whereas the Fi­nance Min­istry be­lieves that the 2014 growth rate will be con­tained to -3%.

“We main­tain our reser­va­tions as to whether this phe­nom­e­non will con­tinue in the com­ing years,” the Coun­cil noted.

The Coun­cil will publish be­fore the end of Oc­to­ber.

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