IMF: Growth in Cyprus expected to resume in 2015

Responding to a question, during a press briefing, Rice noted that given Cyprus’ unprecedented situation involving the resolution of the two large banks, the capital controls adaptation of the business model, macroeconomic uncertainties, and risks to the outlook remain significant, adding that “that`s something to which we will be paying great attention to as we move forward.”

On growth prospects, he said that the macroeconomic assumptions in the program take into account several factors that are expected to affect growth in the short and medium run, including the fiscal adjustment underway, and the recent policy actions in the financial sector.

“Having dealt with the key problems up front, as is the case under the program, growth is expected to resume in 2015, supported by a favorable international tax regime, a well-educated labor force, strong institutions. So the assumption that fiscal, structural, financial sector reforms go forward,” he added.

Rice recalled that there`s a small technical team from the IMF in Cyprus this week to review progress on financial sector issues in connection with the recently approved Extended Fund Facility arrangement for the country.

He noted that «the team is part of a joint technical staff visit with the European Commission and the European Central Bank, so that`s the mission that`s in the field this week relating to financial sector issues.»