Economic growth to exceed 3%, Finance Minister says while presenting 2019 budget

The Cypriot economy is expected to grow more than 3% over the next three years, said Finance Minister Harris Georgiades, while highlighting university education, research and innovation as the next priority areas. The Minister also noted there was no economic bubble.

Presenting the state budget for 2019, Georgiades said the aim was to keep a balanced budget and added that any surpluses would be used for debt reduction.

This is the main principle, this is our policy and we keep on with this policy he underlined.

Public debt is expected to rise to 104% of GDP, despite projections for an increase at 110%, and is expected to subside to 97% in 2019, he went on.

The Finance Minister warned, however, that Cyprus needs to be prepared for a rise in government bond yields.

Georgiades said that the 2019 state budget provides for Euros 8.55 bln revenue and Euros 7.91 bln spending, with a surplus of 2.8% of GDP.

Keeping public spending below 40% was important for Cyprus’ economic size, he said however that an increase in spending is expected in 2019 and 2020 due to the implementation of the General Health Scheme.

After years of recession, the improvement was not immediately felt by the citizens, the Minister went on, he pointed however to the reduction of unemployment, the recovery of salaries and the creation of jobs. He also said that the rate of poverty risk declined to 25.2% in 2017, from 28.9% in 2016.

Replying to questions from MPs, the Minister rejected that the economy showed signs of a bubble. The economy which lost 10.5% of GDP between 2009 and 2014 in now recovering, unemployment is at 7% and inflation stands barely at 1%, he said, adding that these characteristics are contrary to an economic bubble.

The Minister also said that high-value property sales need monitoring. He added that he expected no sanctions for Cyprus’ investment program granting citizenship. The government continues to carefully monitor the scheme and will not hesitate to make more improvements, on the basis of an economic impact study that is underway, Georgiades concluded.

Source: Cyprus News Agency