Cyprus Finance Minister says fiscal deficit below 2% of GDP on 2006
Nicosia, Mar 31 (CNA)-- Cypriot Finance Minister Michalis Sarris said here Friday that public deficit can be reduced below 2 per cent of Gross Domestic Product (GDP) by 2006, through further improving tax collecting ability and harnessing public expenditures.
Speaking to a press conference, Sarris noted that the combination of steady revenues increase and prioritization of public expenditures could reduce fiscal deficit even further below 0.5% of GDP by 2009.
Cyprus entered the EU's Exchange Rate Mechanism (ERM II) on 2005 and must wait for two years before entering the Euro zone. The Cypriot government announced that it will join the Euro on January 1st 2008.
''2006 will be crucial for Cyprus because the European Union will assess Cyprus' readiness to join the Euro'', Sarris noted, adding that the public debt, at 70.3% of GDP on 2005, could be reduced to 67% on 2006.
Noting that Cyprus' growth rate rised to 4%, Sarris added that ''we believe that we will have an eight to ten per cent increase of revenues annually.''
Reaffirming Cyprus' target to join the Euro zone by 2008, Sarris assured that this will not affect Cyprus's social policy.
''Today's figures show a robust economy with satisfying growth rate and almost total employment, low inflation and interest rates as well as an impressive public deficit reduce, due to fiscal discipline and the Cypriot diligence and enterprise.''
''We are determined to remain committed to this target. Through the fiscal discipline we have set a firm basis for the improvement of our economy,'' Sarris said.