Cyprus adopts 2016 budget as austerity programme nears end

GMT 08:20 2015 Friday ,18 December

Arab Today, arab today Cyprus adopts 2016 budget as austerity programme nears end

The Cypriot parliament
Nicosia - AFP

The Cypriot parliament adopted Thursday a budget for next year, the last spending plan to come under an austerity programme imposed by international lenders to bail the nearly bankrupt country out in 2013.

"The 2016 budget marks an exit from the memorandum," ruling Disy party leader Averof Neophytou said, referring to the bailout programme with the troika of international lenders.

The budget forecasts state revenues of 5.9 billion euros ($6.3 billion) and expenditure of 7.4 billion euros.

Revenues are expected to grow by 1.4 percent, while spending is seen easing by 0.4 percent.

The overall deficit is projected at just 0.1 percent of GDP, while the primary surplus (excluding interest payments) is expected to reach 2.4 percent of GDP.

The government expects the economy to grow by at least 1.5 percent in 2015 and by 1.8 percent in 2016.

In return for a 10 billion-euro bailout, international creditors demanded the winding up of the country's second largest bank Laiki and a "haircut" on deposits above 100,000 euros in its largest lender, Bank of Cyprus (Berlin: BC9N.BE - news) .

Cypriots have also had to endure tough austerity measures that saw wages slashed in the private and public sectors and increased consumer taxes such as VAT.

Nicosia is due to exit the adjustment programme next spring.


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