This excludes the recapitalisation of the cooperative banking sector with €175m in December.

In 2017, Cyprus is projected to post a fiscal surplus of 0.7% of economic outlook and twice as much in 2018, the IMF said in a Fiscal Monitor report on its website.

According to the finance ministry’s latest projection, reaffirmed by Andreas Charalambous, director of financial stability of the ministry on Thursday, the government is expected to post a budget gap of 0.5% of economic output in 2015.

“The IMF applies a different methodology based on cash flows,” Charalambous said. “The finance ministry applies the accrual based methodology of the European Union”.

The IMF, which participated in and supervised Cyprus’ bailout together with European Union institutions by making available €1bn in funds, said that the government will generate this year a primary surplus of 2.6% of the economy, compared to 1.4% in 2015. In 2017, the Cypriot government is projected to see its primary deficit rise to 3% and to 3.6% in 2018.

The IMF said on Tuesday that the Cypriot economy is projected to grow 1.6% in 2016, effectively at the same growth rate as in 2015, before growth accelerates to 2% in 2017.

In 2016, the government’s revenue as a percentage of gross domestic product is projected to drop to 38.9% from 39.6% the year before and fall to 38.6% in 2017, the IMF said. The ratio of government expenditure to economic output is projected to drop to 38.8% this year from 41.2% in 2015 and further drop to 37.9% next year.

Public debt, which peaked at 108.7% of GDP last year, is projected to drop to 99.3% in 2016 and to 95.3% following year, the IMF said.

Source: Cyprus Mail