Cyprus sees ’09 economy growth lower than expected

The economy of Cyprus could grow by as little as 1 percent in 2009 as the country struggles with fallout from the global economic crisis, Finance Minister Charilaos Stavrakis said.
Cypriot authorities had previously said they expected gross domestic product growth to slow to 2 percent in 2009 as construction and tourism dips.
'Our latest (GDP growth) forecast was for 2 percent, but it seems like the global slowdown is accelerating,' Finance Minister Charilaos Stavrakis told Reuters during a trip to Cairo to meet Egyptian officials. 'Anything between 1 and 2 percent will be successful.'
Cyprus's economy grew an estimated 3.7 percent in 2008. Fourth quarter year-on-year growth was 2.9 percent.
The European Commission expects Cypriot growth of 1.1 percent this year.
Stavrakis said tourism in the first three months had dropped between 10 and 15 percent, but the country aimed to limit the decline.
Cyprus has offered incentives to the tourism industry to bolster arrivals. Its main market is Britain, where potential holidaymakers are shunning the island in favour of cheaper destinations.
'We are trying to have a reduction of 10 percent in 2009,' he said.
Tourism contributes about 10.9 percent to the country's GDP.
Inflation in 2009 should be between 1 and 1.5 percent, lower than previously thought, Stavrakis also said. He had said in January he expected 2009 annual inflation at 2 percent. March consumer inflation was 1.1 percent.
'Lower inflation is due to a fall in energy prices and a general slowdown in the economy,' he said. (R)