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article imageRevised data shows Cyprus economy shrinking less than thought

By AFP     Mar 11, 2014 in Business

Cyprus's recession-hit economy contracted by 0.8 percent in the fourth quarter of 2013, a slight improvement on the 0.9 percent drop in the previous three months, revised official data showed Tuesday.

A flash estimate issued last month had the economy declining 1.0 percent in the fibal quarter versus 1.1 percent in the three months to September.

But the 10th successive quarterly decline in the Mediterranean island's economy was milder than predicted by the government and the international lenders who bailed the cash-strapped eurozone country out in March 2013.

The latest estimate shows that real GDP, based on seasonally and working-day adjusted data, shrank 5.0 percent in the fourth quarter from a year earlier. A flash estimate in February put it at a higher 5.3 percent for October to December.

In January, the finance ministry had forecast 2013 GDP would fall by 5.5 percent, revising the expected decline from a figure of 8.7 percent anticipated last March when the bailout was secured.

International lenders forecast GDP to decline by another 4.8 percent this year before posting one percent growth in 2015.

The only bright spot in fourth quarter performance was an improvement in tourism revenue, while construction, manufacturing, electricity, transport, trade, banking and services all declined.

Cyprus passed this week its third review by the "troika" of lenders -- the European Commission, European Central Bank and International Monetary Fund -- who granted it a 10-billion euro loan last year to bail out the economy.

Once the evaluation is formally approved, Cyprus will be able to receive the next tranche of the loan.

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