Cyprus' GDP shrinks after Mari naval base blast

Cyprus’s gross domestic product contracted 0.7 percent in the third quarter on a quarterly basis, the statistics department said on Tuesday, after a massive munitions blast which destroyed the island’s largest power station on July 11.  

GDP contracted by 0.6 percent on a year-on-year basis, it said in its flash estimates. Negative growth rates were recorded in the construction, manufacturing and electricity sectors, as well as in sectors of trade and transport. Positive growth rates were noted in tourism, banking and services, the statistics department said.

Although it did not mention it in its statement, economic output on the Mediterranean island was badly affected by the blast of decaying munitions which destroyed Vassilikos, the island’s largest power station. It triggered about a month of rolling power cuts which disrupted business.

Growth estimates for the second quarter of the year were marginally modified downwards, with output of 0.2 percent on a quarterly basis instead of a previously assessed 0.3, and growth of 1.3 percent year-on-year instead of a previous 1.4 percent.

The department also modified quarterly growth for the first three months of the year from zero to -0.3 percent.

Cyprus, which represents about 0.2 percent of the euro zone’s economy, last week forecast growth of about 0.5 percent for the full year.

 

Positive growth rates or stagnation were observed in most EU member states, with an overall 0.2 per cent in both the euro area and the EU27 during the third quarter of 2011, compared with the previous quarter. 

In the second quarter of 2011, growth rates were 0.2 per cent higher in both the euro area and EU 27 zones. 

Apart from Cyprus, the growth rate shrunk in Portugal (-0.4 per cent) and the Netherlands (-0.3 per cent). 

The German GDP grew by 0.5 per cent and the French by 0.4 per cent.

 

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