Cypriot econ­omy to grow 2.7 pct in 2016

Kathimerini English - - Focus -

NICOSIA (AP) – Cyprus’s Cen­tral Bank chief says the is­land na­tion’s econ­omy will grow by slightly more than 2.7 per­cent of gross do­mes­tic prod­uct in 2016 and will hover at around the same lev­els for the next two years. Chrys­talla Ge­orghadji told the Par­lia­ment in Nicosia yes­ter­day that growth is mainly be­ing driven by ro­bust do­mes­tic con­sump­tion, in­vest­ments and ex­ports. Un­em­ploy­ment dropped to 12.1 per­cent in the sec­ond quar­ter of 2016, down from a high of 16.1 per­cent in 2014. She said pub­lic debt is pro­jected to drop to 96 per­cent of GDP in 2019 from a peak of 109 per­cent in 2015. Cyprus emerged in March from a three-year, mul­ti­mil­lioneuro res­cue pro­gram that in­cluded a seizure of sav­ings over 100,000 eu­ros in its two big­gest lenders to prop up a wob­bly bank­ing sec­tor. Fitch said, also not­ing that Wind Hel­las has a joint ven­ture with Voda­fone that al­lows for both cost shar­ing and net­work shar­ing in the de­vel­op­ment of their 2G/3G mo­bile net­work. “These fac­tors are off­set by the sig­nif­i­cant chal­lenges the firm and the Greek telecom­mu­ni­ca­tions mar­ket have ex­pe­ri­enced since the Greek debt cri­sis, and the strong com­pe­ti­tion pro­vided by OTE and Voda­fone,” Fitch stated. years yes­ter­day, hik­ing its bench­mark rate by a more-than-ex­pected 50 ba­sis points as con­cerns about a tum­bling lira eclipsed Pres­i­dent Re­cep Tayyip Er­do­gan’s calls for cheap credit. Er­do­gan, who has de­scribed him­self as an “en­emy” of in­ter­est rates and chas­tised banks for what he says is the high cost of credit, wants the cen­tral bank to lower rates to spur growth. In­vestors have long ar­gued the Turk­ish cen­tral bank needs to tighten, cit­ing the in­fla­tion risk posed by the weaker cur­rency. Yes­ter­day’s “rate hikes show the ex­tent to which do­mes­tic and ex­ter­nal con­di­tions have de­te­ri­o­rated, forc­ing the cen­tral bank’s hand,” Nicholas Spiro, a part­ner at con­sul­tancy Lau­ressa Ad­vi­sory in Lon­don.

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