Stavrakis cautiously confident about prospects of Cyprus economy

Cypriot Finance Minister Charilaos Stavrakis said he is cautiously confident about the prospects of the economy in 2009, as the global financial crisis continues.
“The Cypriot economy, as an open economy, will inevitably be affected from the slowdown in the global economy but we remain cautiously confident that we will do much better than the rest of the EU,'' Stavrakis told a gathering hosted by the Cyprus Union of Bank Employees (ETYK).
The Minister recalled that 2008 will close with a 1% fiscal surplus and an 11% reduction in the public debt, namely from 60 to 49%, which, as he added, corresponds to savings amounting to two billion euro.
''This is a very valuable fiscal weapon which might be utilised to support any bank or other sector of the economy which faces any problems,'' he said.
He described as ''academic'' the discussions regarding the projected growth rate of Cyprus' economy in 2009 which ranges from 3% to 1.5%.
''This is not so important because whatever the forecast growth rate, the remedy is the same, that is, a fiscal expansionist policy which will strengthen the economy,'' he added, recalling that the 2009 budget provides for increased government spending especially in the construction sector, which is considered as one of the driving forces of the Cypriot economy
''If the rest of Europe presents a 1% growth rate, which will mean that the economic crisis will be weaker than initially expected, we will easily reach 3% growth rate. If however Europe's growth rate declines to 0% as many predict, then it is highly likely our growth rate will be much less that 2 or 2.5%,'' Stavrakis said.
''Our goal is to maintain the margin between the performance of the Cypriot economy and the rest of Europe,'' he concluded.