Cyprus Employers worry about state of economy

The Chairman of the Cyprus Employers and Industrialists Federation (OEV) Andreas Pittas expressed the Federation’s concern regarding the course of the local economy, saying that according to the International Monetary Fund, Cyprus’ public debt would reach 3,9%.
On the other hand, he noted the positive aspects of the Cypriot economy, such as the reduction in inflation and the improvement of the trade deficit, due to the drop of imports.
The world economic crisis has had an impact on the Cyprus economy, especially tourism, the construction industry and the consumer at large. This, has caused a drop in public revenue by 10.6% or EUR84 mln. The first semester of 2009, public revenue reached EUR710 mln.
Regarding tourism, Pittas expressed concern, saying that arrivals dropped by 15.1% in June, by 9.2% in May and overall by 10.8% in the first semester of the year.
The Federation, he said, estimates that the decrease in tourist arrivals will continue and drop by 15%.
Referring to the construction sector, he described the situation as “tragic”, especially as regards holiday homes in the districts of Paphos, on the west, and Famagusta, on the east.
As far as consumption is concerned, Pittas said it dropped by 6.5%.
The Federation also expressed concern about unemployment and said it estimates that by December this year it will reach 6% and to this end, it has submitted to the Minister of Labour and Social Insurance a series of proposals to deal with this, according to Pittas.
The President of the Federation called on the banks in Cyprus to drop their interest rates, noting its importance for business activities and competitiveness.
“Interest rates in the eurozone are on average 3.50% while in Cyprus they reach 7.50%”, he pointed out.
Commenting on a government decision to employ an additional 1.080 civil servants, Pittas expressed the Federation’s opposition to that prospect, saying this would cost the state 46 million euro.
“This additional amount of 46 million euro will be paid by the tax payers”, he said, adding “we will not accept to pay new taxes”.