Cyprus: No growth until 2013

 * THE FINANCIAL MIRROR CONSENSUS FORECASTS * 

Economic conditions will be worse in 2012 than in 2011, according to all of the eight panellists on the quarterly Financial Mirror Consensus Forecast, but there is also consensus that things ought to get better by 2013.
The panel, launched not long after the Mari explosion when there was widespread confusion about its impact, comprises respected economists from the private sector and academia. Every quarter, panellists give their opinions about which way the economy is heading and why.
For 2012, the average of the panellists’ forecasts is a negative growth rate of -0.4%, based on three panellists suggesting a stagnant economy (zero growth), four forecasting negative growth and only one expecting a margin growth rate of just 0.1%.
“After clambering out of recession in 2009, we are thus heading into a double dip,” said panel coordinator Fiona Mullen, Director of Sapienta Economics.
“The most common reasons cited for deterioration are weak demand, as a result of the negative impact on incomes of fiscal retrenchment and rising unemployment, and the situation of the banks, which have been hard hit by the Greek debt crisis,” Mullen explained
The negative impact of high electricity prices and a VAT increase were also mentioned by some economists.
Every one of the forecasts expects conditions to be slightly better in 2013 than in 2012, with the forecast of all eight averaging a positive 0.8%.

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