IMF bullish on Cyprus economy

The International Monetary Fund (IMF) has presented a positive outlook on the Cyprus economy, according to the October 2007 World Economic Outlook. The IMF anticipates that real GDP growth in 2007 will remain at 3.8% before falling to 3.7% in 2008. Its estimates are lower than those of the Ministry of Finance (MoF), which revised higher its growth target for 2007 to 4.2% and 4.0% in 2008.

Regarding inflation, the IMF expects that the average HICP will drop to 2.0% in 2007 from 2.5% in 2006 and will reach 2.4% in 2008. The MoF expects that harmonized inflation will reach 2.2% in 2007 and 3.0% in 2008.

IMF forecasts fiscal deficit to drop to 1.0% of GDP in 2007 and 0.6% of GDP in 2008, whilst the MoF’s, anticipates fiscal deficit to reach 1.0% of GDP in 2007 and 0.5% of GDP in 2008.