Cyprus Growth Predicted at 3.9%

The University of Cyprus said that the economy is forecast to expand 3.9% this year before growth slows down to 3.3% in 2019, amid a favorable external environment that may change, ongoing turbulence in the banking sector and deteriorating competitiveness, Cyprus Mail online reported. “The main drivers of the outlook in 2018 and 2019 include the recent strong economic performance in Cyprus, the supportive external environment, the low levels of interest rates and inflation, and the high levels of domestic and European economic sentiment,” the Economic Research Center of the university said in a statement on its website. The ERC said that the modernization of the foreclosure and insolvency framework as well as the legislation on the sale of laws and loan securitization more than two weeks ago, “are expected to enhance the soundness of the banking sector, reduce uncertainty and restore depositors’ and investors’ confidence, with positive effects on economic activity”. The new laws were a condition for the European Commission to approve the acquisition of the Cyprus Cooperative Bank’s operations, a casualty in the battle of Cypriot banks against strategic default and a €19.9 billion ($23.28 billion) mountain of delinquent loans.