Cyprus programme on track, outlook still risky - EU/IMF review

BRUSSELS Tue Feb 11, 2014 7:13am EST

BRUSSELS Feb 11 (Reuters) - Cyprus's adjustment programme is on track and the government's fiscal performance is better than anticipated, the country's international lenders said on Tuesday, but they cautioned that there were substantial risks to the outlook.

Last year, the Mediterranean island became the fifth country in the euro zone to seek a financial lifeline from the EU and IMF after it lost billions of euros on Greek bonds.

The joint statement from the European Commission, the European Central Bank and the International Monetary Fund said Cypriot GDP was expected to contract 4.8 percent in 2014, before rebounding to 1 percent growth in 2015.

Growth contracted by 6 percent in 2013, less than expected.

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