World Economy

Cyprus Slips Deeper Into Recession

Cyprus Slips Deeper Into RecessionCyprus Slips Deeper Into Recession

Cyprus’s recession deepened in the fourth quarter of 2014 as gross domestic product shrank by 0.7% from the previous three-month period, official data showed Friday.

The Mediterranean island suffered a 14th successive quarterly economic contraction, according to a flash estimate from the state statistical service. It was the steepest fall in more than a year and followed a third quarter decline of 0.3%, RTE News reported.

Real GDP, based on seasonally and working-day adjusted data, shrank 1.9% in the fourth quarter from a year earlier. The economy contracted 1.8% year-on-year in the previous three month period.

The European Commission in November cut its 2015 economic growth forecast for Cyprus to 0.4%, from a previous estimate 0.9%, due to high unemployment and bad debt.

The state statistical service said Friday there were positive growth rates in hotels, restaurants, legal and accounting services and trade in the fourth quarter.

But there was a contraction in many other sectors including construction, manufacturing, transport, banking and other services.

The troika of international lenders – the European Commission, the European Central Bank and the International Monetary Fund – bailed out Cyprus in March 2013 to prevent a banking collapse. In return Cyprus agreed to a harsh austerity program.

  Trade Deficit

The Cyprus trade deficit widened further in the January-November of 2014 to €3.41b compared to €2.91b in the same 11-month period in the year before.

Total imports (including imports from third countries and arrivals from other EU member states) increased to €4.73b in January-November 2014, compared to €4.41b in January-November 2013.

Total exports to third countries and dispatches to other EU member states dropped to €1.32b in January-November 2014 from €1.50b in January-November 2013.