NICOSIA – Almost two years after first asking for a 10 billion international bailout that came with harsh measures, Cyprus’ economy is slow to recover with a recession set to last through 2015, the University of Cyprus predicted.
GDP will contract by 0.4 percent compared with an expected 2.2 percent decline for 2014, the university’s economic research center said.
That prognostication is worse than those of the government or the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) that put up the loan monies and expect there will be a growth of about 0.5 percent.
The survey said that a delay in structural reforms and the high percentage of non-performing loans would put a brake on recovery as many Cypriots can’t afford to pay their obligations.
A softener – expected big tourism from Russia – has taken a hit though with that country’s falling oil price effect expected to lessen travel by Russians.
The survey said other factors putting a block on growth are high unemployment, high interest rates and a credit crunch.
But it noted the ECB’s decision to begin quantative easing and the strength of sterling, which is enticing more British holidaymakers to the island, with Britons being the biggest holiday-goers to the island they once used as a colony.