Cypriot economic reforms ‘on track’

Economic reforms imposed on Cyprus as part of the multi-billion-euro bailout from Troika are on track, international creditors have said.

The International Monetary Fund, the European Commission and European Central Bank (Troika) has reported that Cyprus is on track to meet the requirements outlined as part of the €23bn bailout in March. Delia Velculescu, an official from the global monetary body, said the country’s authorities have outlined an “ambitious agenda” so that it can stick to the agreement’s terms, although she warned there was still risks clouding the outlook.

"Our overall assessment is that Cyprus's program is on track," the tripartite committee said in a joint statement. "All the fiscal targets have been met as a result of significant fiscal consolidation measures underway and prudent budget execution."

The near collapse of the country’s banking sector sent shockwaves throughout Europe as investors grew pessimistic over the EU’s heavily capitalised financial institutions. However, many of the fears never materialised, and the IMF’s evaluation should bring comfort over the future of the Cypriot economy.

IMF’s report noted that the the authorities have taken decisive steps to stabilise the financial sector and have already been gradually relaxing deposit restrictions and capital controls. However, the short-term economic outlook "remains difficult and subject to considerable uncertainty" as economic output is set to drop by about 13% cumulatively in 2013 and 2014.

We have an office in Nicosia, Cyprus, where our dedicated professionals can help with any concerns you may have about the recent events.  We combine our extensive global resources with our unrivalled knowledge of local regulations, cultures and languages to help you achieve your business goals.

 
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