The Cyprus economy has exited recession and is registering positive economic growth, which is projected to be maintained, President Nicos Anastasiades said. He noted, however, that the banking sector still has challenges to face, the biggest of which is the restructuring of non-performing loans.
The president, who inaugurated the new building of the Bank of Beirut and the Arab Countries in Limassol, said in his speech that the results of the efforts for Cyprus’ economy are already visible and recalled that only last week Cyprus managed to issue a new 10-year bond at a satisfactory yield, following successive upgrades of its sovereign rating by rating agencies, Famagusta Gazette reported.
“After almost four years of contraction, the economy has officially exited recession and is registering positive economic growth from the beginning of this year, a growth that is projected to be maintained”, he stressed.
He also referred to substantial results in the banking sector, noting that the banks have been restructured and recapitalized–mainly through private capital–and are refocusing their operations with a prudent risk-based approach to lending, while now they have adequate capital.
“Today I can say that confidence and stability have been restored. All restrictions and capital controls imposed in March 2013 have been abolished only two years later, much earlier than expected from the most optimistic economists”, he pointed out.
The president noted, however, that obviously the banking sector still has challenges to face and said that the biggest challenge is to restructure a good part of the non-performing loans, which would simultaneously improve the ability of banks to provide new credit to the economy.
He stressed that the government is addressing this challenge, and has already put in place new tools–new laws and the new directives of the Central Bank–that need to be used to address the high number of non-performing loans in the banking system.
“With a responsible fiscal policy visible through the performance of the public finances, with emphasis on investments, coupled with the targeted structural reforms that we are promoting, we are confident that the economy will be on solid ground in the medium and long term,” he said.
Such policies, he added, involve the fostering of the financial sector and the attraction of strategic partners/investors in the telecommunications and ports industries, the maintaining of a stable tax framework with added incentives for investments as well as the care for more vulnerable groups.
Referring to the BBAC, which has been operating on the island since 1986, he thanked the management for their trust in Cyprus.
“At this important junction for the Cypriot economy, at a time when it is recovering and returning to growth, we warmly welcome the importance that the BBAC has attached on strengthening its investment in the Cypriot economy. This is reflected by bank’s relocation to this new state of the art building”, he concluded.
