NICOSIA – Cyprus’ battered economy, worsened by austerity measures demanded by international lenders, is showing signs of a bounce-back on the heels of a pickup in trade and tourism.
Despite the good indicators, the economy remains in recession. Gross Domestic Product dipped by a seasonally adjusted 0.3 percent in the second quarter from the previous three months, one of the lesser declines recorded since it began shrinking three years ago.
That was shown in preliminary data released by the island’s statistics office. On an annual basis, the economy shrank 2.5 percent in April-to-June, compared to a revised 3.9 percent contraction in the first three months of this year.
Cyprus hasn’t seen growth since the second quarter of 2011, its economy hurt when state banks took big losses from holdings in Greek bonds devalued 74 percent, and with bad loans to Greek businesses who went belly-up in that country’s even worse economic crisis.
The tourism and trade sectors grew in the second quarter, after declining in the previous quarter, the statistics office said. The manufacturing, construction, banking and transport sectors all contracted.
Tourism arrivals rose 6.0 per cent in the first six months of 2014 compared to a year earlier, according to the statistics office.
The Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) expects the country’s economy to shrink about 4.2 percent this year, after a 5.4 percent decline the year before.