CYPRUS 2013: another "annus horribilis"

* Financial Mirror Consensus Forecast sees 3% contraction *

A happy and (we hope, despite everything) a prosperous new year to our readers.

We really would have liked to have started the new year off on a positive note by reporting that our distinguished panel of economists were forecasting better times to come in 2013.
But then you would not have believed us, and the Financial Mirror would have lost its hard-earned reputation for objective analysis in the land where the ostrich reigns.
The hard truth is that every single one of our economists in our quarterly Financial Mirror Consensus Forecast expects the recession to be worse in 2013 than in 2012.
Perhaps not surprisingly for the beginning of the year, with no part-year data to go by, the range of forecasts for 2013 is pretty wide: the mildest forecast is for a contraction of 2.7% in 2013, while the most pessimistic is for a contraction of 5%.
The median of the range (what we call our consensus) is for a contraction of 3% in 2013, from an estimated 2.2% in 2012. For those who prefer to use the mean, the mean average contraction is 3.3%.
The one word that stands out as being used by each of our panellists this month is uncertainty. Uncertainty has prevailed this year as we all waited to discover whether the government would ask for a bailout, whether the president would agree to the terms, how much the bailout would be and whether we would be able to pay it all back.
The last two questions are still pending of course.
Perhaps there is only one thing that can be said with any certainty for 2013, namely that it will be a year of changes.
By the end of this year not only shall we have a new government but perhaps a new way of doing business for the utilities that might be privatised.
We might have new ways of thinking about credit after all that borrowing on the basis of inflated property prices.
And, if Bernard Musyck’s hopes are fulfilled (or to be more accurate, his fears do not come to pass), we shall have a new moral order in Cyprus, in which self-interest and a sense of entitlement take a back seat while we all do our bit to mend this crippled economy.