COVID19: Cyprus eyes financial recovery in late 2020

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Finance Minister Constantinos Petrides said the government aims for an economic recovery to start by the fourth quarter of 2020, as the road map for rebooting the covid-battered economy begins earlier than anticipated on 4 May.

“The aim is to move to recovery because without the economy there cannot be a health system,” Petrides told a televised media conference on Thursday.

He said this staggered post-lockdown phase is the riskiest period in trying to contain the coronavirus pandemic as construction and retail businesses open from next week.

“If there is compliance in this second, more dangerous phase, that needs increased discipline we perhaps need to be more vigilant, then the economy may recover in the fourth quarter and will peak in 2021.”
Petrides cautioned the public to strictly abide by instructions and decrees issued by the Health Ministry as extra caution was required as more people venture from their homes.

He said that the road map to lifting measures introduced to stem the spread of the coronavirus was drafted based on advice from epidemiologists and epidemiological data, and after consulting with social partners.

“The choice of businesses to open first was made based on their sector’s contribution to the country’s GDP, taking into consideration the number of people employed and the risk of transmission”.

The minister said the retail sector contributed over €1 bln in added value to the economy, while it employs 38,000, or 9.4% of the workforce.

As he said, the sector contributes around 12% of revenue flowing into state coffers.

On the other hand, construction employs over 30,000 people, or 7.5% of the total workforce, providing 5% value added to the economy and contributes over 16% of state revenues.

Asked if the government plans include cutting public sector wages, Petrides said the current effort is to boost the economy and that state plans are based on this.

“We should not be financially shortsighted. We need to keep in mind that there will be a day after”.

“If we do not succeed in this second stage (the gradual relaxation of measures) then we enter again to uncharted waters for which no forecasts can be made.”