Cyprus Finance Minister Harris Georgiades stated in an interview: “The economy of Cyprus is moving towards a direction where it will no longer rely on external assistance.” He mentioned that Cyprus will achieve this goal by implementing an economic adjustment program.
Since the agreement reached in March last year between Cyprus and the Eurogroup, along with the International Monetary Fund for a €10 billion (approximately $13.9 billion) bailout, the Cypriot economy, despite still facing numerous challenges, has generally gotten back on track after a year of efforts.
According to the bailout agreement signed between Cyprus, the Eurogroup, and the International Monetary Fund, the largest bank in Cyprus, the Bank of Cyprus, completed its capital restructuring through depositors' funds, with 47.5% of deposits over €100,000 converted into bank shares, while the second-largest bank, Laiki Bank, was forced to close.
Georgiades stated that although the economy is on the right track, many issues remain. He said: “The economy is still weak, and the unemployment rate is rising.” Some analytical institutions estimate that the current unemployment rate in Cyprus is about 17%, expected to reach 19.2% this year, but will decrease to around 18.4% by 2015.
The latest data shows that the Cypriot economy shrank by 5.4% in 2013, which is better than the expectations of international bailout agencies. Some analytical institutions predict that the economy of Cyprus will shrink by 5.3% in 2014, with a slight growth of 0.9% expected in 2015.
