Cyprus says economy is accelerating as end of bailout nears

AP News
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Posted: Oct 19, 2015 6:27 AM

NICOSIA, Cyprus (AP) — Cyprus expects its economy to gather pace in coming years as the country looks to emerge from its international bailout program in 2016.

The finance ministers said Monday the economy could grow by more than 1.8 percent in 2016 and above 2 percent the following year if authorities can keep the politics and finances even-keeled.

Presenting next year's budget to a parliamentary committee, Harris Georgiades said growth this year would reach 1.5 percent, beating creditors' projections.

Georgiades said growth drivers include the maritime, tourism, services and real estate sectors. He said public debt will drop below 100 percent of annual economic output in the next few years.

Cyprus is expected next year to end a 10 billion euro ($11.36 billion) rescue deal it got from creditors in March, 2013 that forced a grab of uninsured deposits in its two largest banks and shuttered the second largest lender.

Georgiades said the country won't need any additional support from creditors as it wraps up its rescue program and ruled out any new tax increases or spending cuts.

He said that high unemployment and the huge number of bad loans that still burden banks are the main challenges. The best way to deal with them, he said, is sustaining a steady growth rate in the economy.