The explosion at the Naval Base “Evaggelos Florakis“, which resulted to the destruction of Cyprus` main power station of Vassilikos, will lead to the decrease of the island`s GDP at around 2,4% on an annual basis. This is stated in a report prepared by the Economics Research Center of the University of Cyprus entitled “Explosion at Mari: Cost and policy conclusions“.

In the report it is noted that the reduction of GDP at 2,4% does not include the loss of capital for the Electricity Authority Cyprus (EAC), the loss of prosperity for households and the negative impact on the expectations and the natural environment. It is also stated that unemployment is expected to rise by 1%.

The University of Cyprus` report states that retail trade has suffered the most from the reduction of electricity power.

It is estimated that EAC revenue will be reduced on an annual basis – July 2011 – July 2012 – by 26-65 million euro due the decrease of power sale while its expenses will rise by 130 – 190 million euro due to the increase of production cost.