Cyprus economy has the fundamentals to remain resilient to developments in the external environment, the Ministry of Finance of the Republic says.

In a written statement issued in reference to a Reuters report on Friday based on a Commerzbank research report, the Ministry stresses that although the Cyprus economy is small it is lively and it has retained a solid position in the financial and sovereign debt crisis. “Cyprus economy has the fundamentals to remain resilient to developments in the external environment,” it is noted. According to the Ministry, GDP growth was 1% in 2010 and is expected to reach 1.5% in 2011 with a potential growth rate of 2.¾ – 3%.

It also quotes the country’s Stability Program (SP) according to which there are budget deficit targets of 4.5% in 2011 and less than 3% of GDP in 2012. It is further stated that the agreed policy measures are expected to have a fiscal impact of 1.5p.p of GDP in 2011 and the fact that by the end of 2010 public debt was only 60.8% of GDP.

Referring to the country’s public debt, the Ministry of Finance says allocation of public debt between domestic and foreign investors by the end of 2010, was 60% and 40% respectively; the public debt which expires in the period July 2011 – end of 2011 is allocated by 75% for domestic investors and 25% for foreign investors.