The unemployment rate is expected to remain this year at the same level as in 2014 or 16% before dropping to 15% in 2016, the IMF said in its October 205, World Economic Outlook report. The IMF expects growth to accelerate to 1.8% by 2020.

The deflation rate is expected to slow down to 1% this year from 3% last year before Cyprus sees a positive inflation rate in 2016, when consumer prices are forecast to increase 0.9%, the IMF said. The current account deficit is expected to shrink to 4.2% of gross domestic product this year from 4.5% the year before and further narrow to 3.8%.

The IMF’s growth forecasts is in line with a revised growth forecast of the European Commission. After contracting for 14 consecutive quarter’s Cyprus returned to growth in January to March for the first time when its economy expanded an annual 0.2%. In the second quarter of the year, the Cypriot economy grew 0.8% compared to the year before according to a preliminary estimate.

According to the IMF’s outlook, the euro area’s economy is expected to grow 1.5% this year and 1.6% in 2016, while consumer prices are expected to increase 0.2% in 2015 and 1% in 2016.

Source: Cyprus Mail