Cyprus growth seen at 4% despite fuel hike

The rate of growth of the Cyprus economy in 2005 is seen at 4%, despite the negative consequences from a sharp increase in crude oil prices, Finance Minister Makis Keravnos said.

Speaking during the Annual General Meeting of the Association of Certified Accounts (SELK), Keravnos repeated the government projections made earlier, anticipating a better economic performance during the year.

“We also view the effort to increase the retirement age to 63 from 60 as part of the effort to place state finances on a stronger footing and help in the drive to enter the euro-zone after spending the 2 year mandatory period in ERM2,” said Keravnos.

He said the audit and accounting sector is a very important part of the Cyprus economy, adding that the sector has increased by 9% in absolute terms during the 1990-2003 period and by 7% during 1996-2003.

According to Keravnos, the rate of growth of the economy for 2005 will hover at 4%, despite the negative repercussions from rising oil prices. The fiscal deficit will be reduced to 2.9% of GDP from 4.2% in 2004 and 6.4% in 2003, in line with government forecasts made in the Convergence Plan submitted to Brussels for the 204-2008 period.

Public debt is seen at 69.1% of GDP from 71.9% in 2004 and below 6% by 2008.