The economy is expected to expand at the same pace in 2018 with growth slowing down to 2.7% over 2019 and 2020, the finance ministry said in its Stability Programme 2017-2020. In 2018 to 2020, the government expects to generate a fiscal deficit of 0.4% of gross domestic product.

In the draft budgetary plan published in October, the finance ministry was forecasting a 2.8% growth rate for this year accompanied by a fiscal deficit of 0.6% of economic output. Last year, the government generated a fiscal surplus of 0.4% against a forecast of 0.3%. The finance ministry expects to see public debt, which rose to €19.3bn last year, drop as a percentage of economic output from 107.8% in 2016 to 104% this year and 99.7% next year. In 2019 and 2020, debt is projected to decline to94.6% and 88.8% respectively.

Less than two weeks ago, the International Monetary Fund said that it expected public debt to increase to 109.3% this year and drop below the 100% mark first in 2020.

The finance ministry expects the unemployment rate to drop this year to 11.5% from 13% last year and further to 10% in 2018. In 2019, the jobless rate is expected to drop to 8.5% and 7% in 2019 and 2020 respectively, after remaining in the double-digit area since 2012.

Source: Cyprus Mail