The Cyprus economy is on track to beat the projections of its international lenders, as the economic downturn in the fourth quarter of 2013 was limited to 5.3% of GDP, according to a flash estimate issued by the statistical service Cystat.
If confirmed by the final data, the 2013 GDP contraction will be limited to 5.4%, compared with the projections of the troika of international lenders for a steep downturn of 7.7% as revised during the second review. In its initial estimates, the troika projected a downturn of 8.7%.
A senior European Commission official said on Tuesday that Cyprus is the only programme-country to outperform its fiscal targets.
Cyprus has been in recession since Q2 2011. Faced with the collapse of its banking sector, Cyprus and the troika agreed last March on a €10 bln bailout that featured an unprecedented haircut on deposits over €100,000, coupled with strict capital controls that hampered economic activity. So far Cyprus had three positive programme reviews, whereas restrictions have been gradually eased.
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