Cyprus: 2009 Article IV Consultation: Staff Report; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for Cyprus
IMF Staff Country Reports, August 14, 2009
Source details
- Canonical URL
- Cyprus: 2009 Article IV Consultation: Staff Report; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for Cyprus
Other formats
Bibliographic details
- Published: August 14, 2009
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781451809978.002
Key findings
- Despite its resilience so far, the economy of Cyprus is slowing down and risks are increasing.
- The expected slowdown will increase credit risk in banks.
- Given the size and concentration of the banking sector, increased credit risk could have systemic implications in some plausible but unlikely extreme scenarios.
- Executive Directors have endorsed the government’s objective to achieve a balanced budget over the medium term.
Risks and scenarios
- Banking sector vulnerability:
- Rising credit risk across banks linked to the economic slowdown.
- Systemic implications are possible in some plausible but unlikely extreme scenarios because of the size and concentration of the banking sector.
Policy recommendations
- Fiscal policy:
- Endorsement of the government’s objective to achieve a balanced budget over the medium term.
- Recommendation to adopt a medium-term budget framework.
- Public sector liabilities:
- Recommendation for more effective management of public sector liabilities.
Thematic coverage and subject areas
- Banking; Commercial banks; Financial sector; Financial institutions; Financial services; Loans; Financial Sector Assessment Program.
- Economic sectors; External debt.
- Special Data Dissemination Standard (SDDS).
International Monetary Fund. Cyprus: 2009 Article IV Consultation: Staff Report; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for Cyprus. August 14, 2009.