Cyprus Government committed to reducing fiscal deficit to 2.5%

The government remains committed to the target it has set to bring its deficit down to 2.5% in 2012, a Ministry of Finance Press release, issued here today, reads.

Commenting on figures released Monday by Eurostat on the economy for 2011, the Finance Ministry underlines that the government remains committed to a balanced budget based on the EU Fiscal Pact, which was signed by Cyprus President Demetris Christofias on March 2.

The year 2011 was indeed a difficult one for the economy of Cyprus, the Ministry said in a press release, adding that “in late summer of 2011 the government began an effort, with the valuable contribution of the parliamentary parties and the social partners and based on the European Commission’s guidelines, to prepare and adopt three packages of measures for the economy, receiving the Commission’s favorable comments”.

The Ministry of Finance notes that the adoption of measures aiming at fiscal consolidation brought its fiscal deficit down to 6.3% in 2011, confirming its predictions for a fiscal deficit around 6%.

On the increase of public debt, the Finance Ministry explains that it has risen by 4.7%, as Eurostat’s figures show, after a loan agreement signed with Russia in order to fully cover the Republic’s financial needs for 2012.

According to the Ministry, the results of the first quarter for 2012, presenting a slight deviation from the budget targets, indicate that the target to bring fiscal deficit down to 2.5% can be achieved with the adoption, if needed, of additional measures that will be determined with the social partners, following intensive consultations.