Cyprus growth cut, but no serious impact expected from subprime crisis

Cyprus Central Bank Governor Athanasios Orphanides said on Tuesday that the subprime crisis in the US market is not expected to have any serious impact on the Cypriot economy, while Finance Minister Michalis Sarris reiterated that he expects economic growth around 4.0% for 2008, compared to 4.4% for 2007.
”We expect a slowdown in the Euroarea, compared to our forecasts,” Orphanides said, adding, ”at the moment we do not have particular concerns regarding our growth.”
He clarified that a slowdown after very good forecasts for the Euroarea is not something which should concern Cyprus,” adding however ”the main concern is the inflation tendencies, largely due to the oil prices and particularly whether these inflation tendencies will be consolidated this year.”
Regarding the crisis in the stock markets, Orphanides said, “Given the situation we do not predict any serious impact on the Cypriot market.”
On his part, Sarris referred to the growth rate of 4.4% achieved by Cyprus in 2007 whereas in 2006 the growth rate reached 4%.
”And even if, as the Governor pointed out, (the economy) is affected in 2008, we have strengthened the economy so that it will remain at these level,” he added.
Cyprus, a member of the EU since 2004, joined the Eurozone on 1 January 2008.