FUNDS: EBRD says zero growth for Cyprus in 2015

A September report about the “Regional Economic Prospects in EBRD Countries of Operations” notes that conditions in Cyprus are gradually improving, but output is still expected to fall further this year with a bottoming out in 2015.

For 2014 as a whole, the EBRD expects GDP to fall by 3.5%, which is slightly better than the current Troika expectations (-4.2%).

It is added that there is more than usual uncertainty surrounding the 2015 forecast, with EBRD expecting a bottoming out of the economy by then, with zero growth for the year.

The report says moreover that the economy of Cyprus, which is a new country of operations for the EBRD, continued contracting in the first half of 2014, albeit at a slower pace, thanks to a gradually improving external environment and rigorous implementation of the authorities’ adjustment programme, supported by the Troika.

It also states that non-performing loans have remained high for a long time in many countries. In Cyprus, in particular, “the economy faces severe problems, not least in the banking sector where most lending has dried up and non-performing loans are around a staggering 50% of the total” the report notes.

It is added that the country`s economy remains in deep recession, but signs of confidence and optimism are becoming increasingly apparent.