In accordance with the latest macroeconomic scenario, published by the Ministry recently, Cyprus’ primary balance is estimated to remain at last years’ level as a percent to GDP at about -1.8%.

Debt to GDP ratio is anticipated to peak in 2014 rising to 122% from 111.5% the year before, attributed among other things to “a high primary deficit and the snow ball effect”.

The estimated over all performance from the initial target of 2013 is about 2 ½ p.p. of GDP, which was translated into tightening the target for 2014 from a primary deficit of 4.1% of GDP (April 2013) to 1.8% (April 2014).

The Ministry said that consolidation measures introduced between 2012-2016 total 10 p.p. of GDP, (2012-13: 6% of GDP; 2014: 2.75% of GDP; and 2015-16: 1.33% of GDP). Consolidation measures for 2012-14 already enacted totalled 8.75% of GDP.

The Ministry added that the General Government Budget Balance exhibited an improvement with the deficit falling to €897 million in 2013 compared to a deficit of €1,135 million the year before. As a percentage of GDP, it fell to -5.4% from -6.4% in 2012.

Total revenue fell in absolute terms to €6,656 million in 2013 from €6,974 million the year before exhibiting a negative rate of growth of 4.6% explained by the developments in the economy as well as by the implementation of a series of measures on the revenue side estimated at about 2 p.p. of GDP.

Total expenditure exhibited a negative rate of growth of 6.9% falling to €7,553 million in 2013 from €8,109 million the year before brought by a series of measures introduced on the expenditure side such as on wages and salaries, social schemes as well as to a prudent implementation of the 2013 budget.

Interest expenditure exhibited a negative rate of growth of 2.7% falling to €549 million in 2013 from €564 million the year before brought by the reduction in the cost of borrowing despite the increasing debt stock.

Source: Famagusta Gazette