The European Commission winter forecast converges with the government’s macroeconomic projections, the Cypriot Ministry of Finance has said.
The EU Commission in its winter forecasts has said that in 2020 the Cypriot economy will contract by 5.8% due to the Covid-pandemic revising downwards its previous Autumn projections over a 6.2% contraction.
The revised projections converge with the government forecasts, the Ministry said in a press release.
Furthermore, the Ministry highlighted that the contraction rate in Cyprus in 2020 is expected to be smaller by 1 percentage point compared with the EU average forecasted at 6.8%, while stressing that Cyprus compares favourably with most EU member-states with a large tourist sector, for which the EU forecasts will contract by 9%.
“The EU Commission confirms the Cypriot economy’s strong recovery in the third quarter of 2020 (up by 9.4% compared with the previous quarter) was brought about due to high domestic demand which was the result of government fiscal support programmes, but however came to a halt due the new restrictions imposed in the end of 2020,” the Ministry said.
Concerning the Commission forecasts for 2021 and 2022, the Finance Ministry says the EU Commission projects that the Cypriot economy will return to a growth trajectory with 3.2% growth in 2021 and 3.1% in 2022 “without factoring in the potential spending associated with the EU Recovery Fund which could lead to a more improved projection.”