Finance Minister Takis Klerides revealed on Wednesday that economic growth in Cyprus is expected to slow slightly to between 2.5% and 3%, compared with around 4% in 2001.
Analysts in the region have suggested that Cyprus's economy is likely to be adversely affected by an international drop in tourism following the September 11 attacks. However, Mr Klerides observed that the island has become increasingly less reliant on tourism, which currently accounts for around one fifth of GDP, and predicted that the economy would still perform reasonably well.
'A deterioration of the international economic climate is not expected to significantly reduce the rate of growth for the current year and our estimates are that it will range from 3.5% to 3.0%,' he announced.
The Finance Minister added that in the run-up to Cyprus's expected EU accession in 2004, the financial and telecommunications sectors are set to grow, and revealed that the government expected to reduce its fiscal deficit to 2% this year, and to phase it out entirely in two years' time.
The shortfall for 2001 was 2.9%, but the country's tax authorities have announced plans to improve revenue collection and stamp out tax evasion, and it is hoped that this will go some way towards closing the gap.
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