Minister of Finance Charilaos Stavrakis said on Friday that Cyprus is expected to have the highest and only positive growth rate in Europe in the year 2009.

Commenting on the latest projections of the International Monetary Fund (IMF) that Cyprus' growth rate is expected to be 0.3% in the year 2009, Stavrakis said that according to calculations of the Ministry during the first quarter of 2009 Cyprus' growth rate will be ''quite satisfactory and close to 2%.''

He furthermore said that ''2010 will be a difficult year'' and assured that the government would be making sure to deal with current financial conditions in order to minimise the cost on the taxpayers and the economy in the years to come.

Speaking after a meeting at the Ministry to brief the private sector on the initialling of an agreement between Cyprus and Russia for the avoidance of double taxation and to discuss the action plan for 2009 for attracting foreign investments, Stavrakis said it was positive that, according to IMF figures, ''Cyprus is expected to have the best performance in the whole of Europe.''

''This reaffirms the government's position that the fiscal policy it has been following is the right one, which secures the highest possible growth rate in very adverse external conditions,'' he added.

Asked if the slower growth rate increases the state's costs, Stavrakis said ''it creates upward pressure on unemployment and possibly a great deterioration of public finances.''

''This is why we are handling public finances in a very conservative and cautious manner, in an effort to restrict ourselves to focused expenditure,'' he added.

Stavrakis said ''2010 will be a difficult year and thus we need to maintain several fiscal ammunition in order to support the real economy,'' adding that ''any expenditure that is not a dire necessity at this moment to support the economy is expenditure that the taxpayer and the citizens will bear in the coming years.''

April 24, 2009

Financial Mirror