CYPRUS’ Gross Domestic Product shrunk on a seasonally adjusted by just 0.3% In the fourth quarter of 2009 compared to the previous quarter and by 2.7% compared to the corresponding quarter of 2008.
According to CYSTAT, the shrinkage of economy in the fourth quarter was mainly due to “the very negative growth rates” of construction and hotels and restaurants, as well as the negative performance of manufacturing, retail and wholesale trade, and transport activities. The broad Services sector remains the only sector recording positive performance, as the Financial Intermediation activities present marginal growth rates.
Cyprus’ economy continues to deteriorate while the European economy recovers, although slower than expected. According to Eurostat, the Euro area economy grew by 0.1% in the fourth quarter of 2009 compared to the third quarter and the economy of the EU27 also grew by 0.1%.
The Greek economy has shrunk by 0.8%, while the German economy has remained unchanged on a three-month basis. The Italian economy also shrank although it grew in the third quarter.
In the Euro area, Cyprus’ economic performance is the worst after Greece but it has performed better than those countries outside the euro area such as Latvia, Romania and Hungary.
On Thursday, Finance Minister Charilaos Stavrakis said that if the government’s plan to save the economy was not pushed through there was a danger Cyprus would end up with the same economic crisis as Greece.
This will be a good test of the Government’s strength, or weakness in standing up to the Unions.