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Creditors pleased with Cyprus

July 31, 2013

International creditors supervising granted bailout loans have said debt-stricken eurozone member Cyprus has made good progress in consolidating its public spending. But they warned of ongoing uncertainties.

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A security guard stands at the entrance of a branch of the Cyprus Popular Bank PATRICK BAZ/AFP/Getty Images
Image: Getty Images

Senior International Monetary Fund official Delia Velculsescu said Wednesday Cyprus was on the right track to implement reforms it had agreed to in return for qualifying for a 10-billion-euro ($13.2-billion) bailout.

The IMF mission chief for Cyprus said the fiscal measures put in place under the scheme had led to better performance than expected, but warned that continued prudence was necessary.

But despite a number of uncertainties, Velculsescu saw no reason to revise down his organization's economic forecast for the small Mediterranean nation.

EU finance ministers approve ten billion euro bailout for Cyprus

No quick fix

In May of this year, the IMF said Cyprus' GDP would drop by 8.7 percent in 2013 and a further 3.9 percent in 2014, adding that things would only look rosier in the following year with growth expected to reach 1.1 percent.

Cypriot Finance Minister Haris Georgiadis insisted Wednesday the banking sector was on its way to being stabilized.

A rescue deal hammered out with Nicosia's eurozone partners and the IMF had forced large savers in the country's two largest banks to take huge losses. Capital controls were imposed to prevent a run on deposits.

hg/hc (AFP, AP)