Cyprus posts first quarterly growth in nearly 4 years

Cyprus posts first quarterly growth in nearly 4 years

Nicosia (AFP) - The Cypriot economy grew in the first quarter for the first time in nearly four years, with official figures released on Wednesday showing an expansion of 1.6 percent.

The recession-hit Mediterranean island had endured 14 successive quarters of contraction before the flash estimate for January to March from the state statistical service.

It came as EU statistics showed that the eurozone economy as a whole had expanded by 0.4 percent in the first quarter, with a surprising performance by France where growth exceeded powerhouse Germany's.

It was the first time the Cypriot economy had grown since the second quarter of 2011 and came after a contraction of 0.4 percent in the fourth quarter of 2014.

Seasonally adjusted data showed that year-on-year the economy grew 0.2 percent compared to a 1.8 percent retreat in 2014.

Finance Minister Harris Georgiades hailed an "important development which underlined the positive prospects of the Cyprus economy."

He said there was a "long way to go" as the recovery was at an embryonic stage and therefore remained "fragile".

"For this reason we must continue our joint effort to reform and consolidate the economy and refrain from premature celebration, but also avoid negativity."

Earlier this month, the European Commission forecast Cyprus's economy would contract 0.5 percent this year and grow 1.4 percent in 2016.

The state statistical service said on Wednesday there were positive growth rates in hotels, trade, restaurants, electricity, health, education, legal and accounting services in the first quarter.

But there was a contraction in construction and manufacturing.

A troika of international lenders -- the European Commission, the European Central Bank and the International Monetary Fund -- granted Cyprus 10 billion euros ($13 billion) in emergency loans in March 2013 to prevent a banking collapse.

In return, Cyprus agreed to a harsh austerity programme but aims to exit from the bailout in 2016.

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