Browse

You are looking at 1 - 10 of 30 items for :

  • Fiscal Policy x
Clear All
International Monetary Fund. European Dept.

Cyprus experienced significant internal and external imbalances owing to the European financial crisis. The oversized and weak banking sector continued to be a threat to the sovereign. Greek debt restructuring, together with loan losses of both Cyprus and Greece, resulted in the two largest banks being declared insolvent. However, the authorities have taken unprecedented steps to address the country’s banking problems. Temporary administrative controls have been taken to preserve financial stability, while the Extended Fund Facility (EFF) arrangement has been aimed to stabilize the financial system and achieve fiscal sustainability.

International Monetary Fund. European Dept.

Cyprus experienced significant internal and external imbalances owing to the European financial crisis. The oversized and weak banking sector continued to be a threat to the sovereign. Greek debt restructuring, together with loan losses of both Cyprus and Greece, resulted in the two largest banks being declared insolvent. However, the authorities have taken unprecedented steps to address the country’s banking problems. Temporary administrative controls have been taken to preserve financial stability, while the Extended Fund Facility (EFF) arrangement has been aimed to stabilize the financial system and achieve fiscal sustainability.

International Monetary Fund. European Dept.

In recent years, the IMF has released a growing number of reports and other documents covering economic and financial developments and trends in member countries. Each report, prepared by a staff team after discussions with government officials, is published at the option of the member country.

International Monetary Fund

This 2002 Article IV Consultation highlights that after four years of strong growth, economic activity in Cyprus has tailed off since late 2001, affected by the global economic slowdown. The authorities estimate growth for 2002 to have declined to 2.3 percent, with falling tourist arrivals and weakening consumer and business confidence. Inflation has risen to 2.9 percent year-over-year in December on account of indirect tax increases, but core inflation remains low. The current account deficit is expected to have deteriorated in 2002 to 5.5 percent, on account of lower tourism receipts and temporary factors.

International Monetary Fund. European Dept.

EXECUTIVE SUMMARY Economic developments have been encouraging. The recession in 2014 was milder than expected and GDP growth was positive in the first quarter of 2015 for the first time in almost four years. The fiscal outturns have exceeded program projections by a large margin. Liquidity and solvency in the banking system have improved, allowing the removal of all external payment restrictions. Program performance has been generally strong. Compliance with quantitative conditionality has been good and the authorities have advanced structural reforms. The reviews were held up by delays in establishing a private sector debt restructuring framework, but the new insolvency and foreclosure frameworks are now in place. Further efforts are needed to put Cyprus’s economy on a sound footing. Effective implementation of the new private debt restructuring framework will be essential to address the high level of non-performing loans and, hence, to consolidate financial stability and boost growth. The authorities should maintain prudent public finances given the still-high public debt, and continue their structural reforms, which are critical to support the sustainability of public finances and growth. Maintaining the reform momentum will be challenging. A difficult political environment could continue to complicate passage of important pending reforms. Completion of the reviews would make available SDR 222.75 million (about €280 million). Total access under the arrangement is SDR 891 million (563 percent of quota, about €1 billion). The European Stability Mechanism has released €5.7 billion (of €9 billion committed); an additional €100 million will be disbursed upon completion of this review cycle.

International Monetary Fund. European Dept.

This paper discusses Cyprus’ First Review Under the Extended Arrangement Under the Extended Fund Facility and Request for Modification of Performance Criteria. The program is on track, and ownership by the authorities has improved. Fiscal targets were met with a comfortable margin. All structural benchmarks were also observed, albeit some with a brief delay. The authorities have made important strides to complete the bank resolution process, publish a roadmap to gradually ease payment restrictions, and finalize a restructuring strategy for the cooperative credit sector. However, much remains to be done to fully implement the financial sector restructuring strategy and restore confidence in the system.

International Monetary Fund. European Dept.

This paper focuses on Cyprus’ Fourth Review Under the Extended Arrangement Under the Extended Fund Facility (EFF) and Request for Modification of Performance Criteria. The program remains on track. Fiscal targets for the first quarter were met with considerable margins, domestic payment restrictions were fully lifted, and the coop sector was consolidated. The authorities intensified efforts to overcome delays in the implementation of structural measures. There are three key policy challenges: (1) addressing the high level of nonperforming loans; (2) maintaining fiscal sustainability; and (3) strengthening institutions to support fiscal consolidation efforts and long-run growth. Risks to the program remain significant, in particular those related to still strong macro-financial linkages.

International Monetary Fund. European Dept.

Cyprus’s Third Review Under the Extended Arrangement Under the Extended Fund Facility focuses on strong ownership and implementation of its program. Despite the difficult environment in which the authorities operate, the political commitment remains strong while every effort is being made to maintain strong social cohesion. Steadfast implementation has produced tangible results with indications that the healing process is already under way. Although a difficult adjustment is still ahead, with the guidance of EU and IMF staff, Cyprus has placed itself in a good position to continue along the agreed path.

International Monetary Fund. European Dept.

Cyprus experienced significant internal and external imbalances owing to the European financial crisis. The oversized and weak banking sector continued to be a threat to the sovereign. Greek debt restructuring, together with loan losses of both Cyprus and Greece, resulted in the two largest banks being declared insolvent. However, the authorities have taken unprecedented steps to address the country’s banking problems. Temporary administrative controls have been taken to preserve financial stability, while the Extended Fund Facility (EFF) arrangement has been aimed to stabilize the financial system and achieve fiscal sustainability.