Cyprus is expected to return to growth in 2015, while the capital control imposed by the bailout program signed in 2013 can soon be dismantled, Central Bank of Cyprus Governor Chrystalla Georghadji said before the parliament’s financial affairs committee earlier today.
Georghadji noted that she is expecting a 0.5% growth in the country’s economy in 2015, while the European Commission’s forecast of 2.8% contraction in the economy in 2014 was realistic. “I am optimistic that 2015 will be a year where Cyprus will return to growth. The signs of recovery are faster,” the governor, who is also representing the country in the European Central Bank Governing Council, underlined, although she avoided making any reference to the Eurozone economy.
In early 2013, Cyprus needed an international bailout package of 10 billion euros and the island’s authorities imposed the first capital control in the history of the Eurozone to prevent a catastrophic run in banks. Despite the fact that domestic control has already been fully lifted, vetting is still required for large overseas bank remittances. “We have assessed that after the successful results of the bank stress tests, there has been a stabilization in the system. We have to ensure that it is permanent, and once that is ascertained, and I imagine that happening soon, the last restrictions on capital movements will be eased,” Georghadji said.
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