Cypriot Finance Minister Constantinos Petrides said on Friday that the country’s economic growth is expected to slow down to 2.9 percent in 2020 from 3.2 percent this year.
Presenting to parliament the state budget for next year, the minister said that the sovereign debt, which peaked at about 107 percent in the upheaval that followed the 2013 economic crisis and bailout of the eastern Mediterranean island country, will fall to 97.4 percent of GDP in 2020 and will continue on a downward trajectory during the year, settling at around 91 percent.
“The public debt’s downward course, which is ensured through budget surpluses, is the responsible stance we must keep towards our children and future generations so that we don’t saddle them with an unbearable bill,” Petrides said.
He said that the budget revenue is expected to reach 10 billion euros (11.06 U.S. dollars) and expenditure to 9.4 billion euros, leaving a surplus amounting to 4 percent of GDP, perhaps the highest among European Union (EU) countries.
Noting that robust public finances mean sustainable economic growth, he warned that there must not be a return to tendencies to satisfy demands and pressures for unreasonable public expenditure.
Petrides, the former interior minister who took over as finance minister on Tuesday in a reshuffle of the government, warned against complacency as the effort to bolster the Cyprus economy has not finished yet and more reforms are needed.
He added that despite the recovery of the economy, there were a lot of external variables that could negatively affect the recovery, most notably the uncertainty gripping the EU over Brexit and the escalation of commercial tensions between large economies.
“This created a tendency towards protectionism at a time when the global economy is expected to slow down,” Petrides said.