Cyprus escapes recession in Q1

The Cyprus economy narrowly escaped contraction in the first quarter of 2009, with a seasonally adjusted growth rate of 0.01% over the previous quarter, according to the “flash estimate” released on Friday.
Nevertheless, this was considerably weaker than the 0.5% recorded in the fourth quarter. Moreover, the year on year growth rate of 1.6% (seasonally adjusted) is much lower than the growth rates Cyprus is used to, which normally range from 3.5% to 4%.
On a non-seasonally adjusted basis, the annual real GDP growth rate was 1.4%.
The Statistical Service reported that the deceleration was mainly caused by a contraction in hotels and restaurants, manufacturing, trade and transport activities.
This was offset by a strong performance for financial intermediation (banking), construction (presumably government works) and “the broad Services sector”, which would include government spending.
A full breakdown will be published in the next couple of weeks.

Fiona Mullen