EU report forecasts Cyprus fiscal deficit at 1.9% for 2009

EU's Quarterly Report on the Euro Area estimates that the fiscal deficit in Cyprus for 2009 will reach 1.9% of GDP.

According to the report, the deficit in Cyprus will rise to 2.6% in 2010, while forecast for real GDP growth show that Cyprus will mark the highest economic growth in the Euro area both in 2009 and 2010 with 0.3% and 0.7% respectively.

Nevertheless, in 2010, Cyprus along with Luxemburg (2.8%) and Slovakia (2.9%) will be the only countries with deficit less the 3% limit for by the Maastricht criteria.

The report notes that the euro-area economy is still deep in recession territory but the EU's strong and coordinated policy response is providing tangible support to economic activity and sentiment indicators and financial markets have started to send some tentative signs of improvement.