After a chaotic month in which Cyprus was pushed to the brink of default and a possible exit from the euro zone, Cypriots knew things would get bad. But not this bad.
According to a bleak assessment released on Thursday by its European partners, Cyprus will fall into a downward spiral for at least the next two years, with the economy shrinking up to 12.5% during the period as the country reduces a banking sector that had ballooned to over five times its gross domestic product.
And because the economy will do worse than expected, Cyprus must soon raise €13 billion ($17 billion) — nearly twice the amount the government thought it would have to come up with just a month ago — to keep its debt and deficit from spinning out of control and to meet the terms of a €10 billion ($13.1 billion) bailout secured last month by newly elected president Nicos Anastasiades.
“In the short run, the economic outlook remains challenging,” the European Commission report said.
New York Times
“In the short run, the economic outlook remains challenging,” the European Commission report said.
New York Times