Cyprus : Second Post-Program Monitoring Discussions
Press Release; Staff Report and Statement by the Executive Director for Cyprus
Series:Country Report No. 8/153
Add to cart
Publication year: 2018
Cdn: $23.50; US: $18.00
The economic recovery has gathered further momentum. Strong GDP growth has supported employment. While the current account deficit has widened reflecting the high import content of demand, persistent price and wage moderation have sustained competitiveness. Improving cyclical conditions contributed to a sizable primary fiscal surplus and a decline in the public debt ratio. However, the economy is still burdened with legacies from the crisis. Despite accelerating growth, private sector debt continues to be very high reflecting the slow pace of deleveraging. Banks’ asset quality remains poor, weighing adversely on profitability. To support the position of the Cyprus Cooperative Bank and deal with NPLs more broadly across the banking system, the government has taken actions aimed at encouraging consolidation and reinforcing banks’ balance sheets.