Cyprus economy grows by 3.2 pct in Q1, banking sector further shrinks

Source: Xinhua| 2019-06-08 00:21:48|Editor: yan
Video PlayerClose

NICOSIA, June 7 (Xinhua) -- Cyprus' economy grew by 3.2 percent in the first quarter of 2019, while the banking sector recorded a further shrinking, according to statistics released on Friday.

Data released by the Statistical Service showed that the Gross Domestic Product (GDP) in the first quarter stood at just below 5 billion euros, an expansion of 154.8 million euros on year.

Finance Minister Harris Georgiades also said that the public finances recorded a surplus of 400 million euros in the first quarter, offering a comfortable buffer for economic stability.

The banking and insurance sector was the only one which showed a negative contribution to the economy of the eastern Mediterranean island, which dropped by 13.2 million euros or 4 percent in Q1 compared with the first quarter of 2018.

That was the second year in a row the once oversized banking sector recorded a reduced contribution, after its share in the economy dropped by 80 million euros in 2018 relative to 2017.

Economists said this was due to an effort by the banks to reduce their size and risks by shedding off non-performing loans, following their 2013 experience when the entire banking system was resolved as part of the bailout of the Cypriot economy by the Eurogroup and the International Monetary Fund.

The biggest contribution to the economy came from the public administration, with a sum of 1.1 billion euros, an increase of 2.4 percent over the previous year.

It was followed by commerce, hotels and restaurants with a contribution of 955.2 million euros and an increase of 1.2 percent, the management of property with 489.1 million and an increase of 0.7 percent, and the professional, scientific and technical activities sector with a contribution of 486.4 million euros and an increase of 6 percent.

But the sector with the biggest percentage increase in contribution to the economy was information and communications with a contribution of 252 million euros and an increase 14.3 percent.

The Cypriot economy ended up at 20.29 billion euros at the end of 2108, showing a growth of 757.5 million euros or 3.9 percent over 2017.