CYPRUS: Economy in recovery, but still some way to go

The government is confident that after the successful €1 bln bond issue last week, a stability in public spending and the favourable comments by rating agencies, it will return to its development programme by investing in projects that will enhance growth, once again.

Speaking during the inauguration of a community project in Kato Polemidia, Limassol, on Sunday, President Nicos Anastasiades said that despite the fact that the country’s economy is recovering, there are still problems which need to be addressed, with his government will do its utmost for the implementation of projects suspended due to the financial crisis.
“Every time we inaugurate a development project, we provide the nation with another tool to address the economic recession. Promoting development and infrastructure is the primary goal of every government, but also a fundamental precondition for restarting the economy,” the President noted, adding that “this is the intention of the government, to the extent the country’s economy allows us to do so.”
Having agreed to a €10 bln bailout programme from the Troika of international lenders (European Commission, European Central Bank, IMF) in March 2013, Cyprus was locked out of the markets and only last year returned with a €750 mln bond issue for the first time, to roll over its current debt and lower the cost of state borrowing.
The passage last month of a package of measures on foreclosures and insolvencies, will also help reduce the runaway level of non-performing loans at commercial banks, currently estimated at 55% of the system’s loanbook, with the ECB possibly including Cyprus in its ‘quantitative easing’ programme and buying local bonds.