Cyprus PIO: News Update in English, 98-10-20

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From: The Republic of Cyprus Press and Information Office Server at <http://www.pio.gov.cy/>

News Update

Monday, 00/10/98

CONTENTS

• [01] More pressure should be put on Turkish side if progress in Cyprus is to be achieved, says Spokesman
• [02] Finance Minister presents 1999 budgets before the House

[01] More pressure should be put on Turkish side if progress in Cyprus is to be achieved, says Spokesman

He was commenting on an interview by US Presidential emissary, Richard Holbrooke on Sunday with the Athens paper "To Vima" in which he said that he does not believe that there is any chance of making progress in the Cyprus problem at this stage because the Turkish side has no intention of changing its positions.

Mr Holbrooke added that he interrupted his mediating effort in May because of this position adopted by the Turkish side but added that he would continue to be in touch with the leaders of the Greek and Turkish Cypriot communities.

"Mr Holbrooke's comments are correct and they touch the core of the issue, " Mr Stylianides said.

He stressed that the international community and in particular the US, who recognise the intransigent positions of the Turkish Cypriot leader, should therefore exercise greater pressure on the Turkish side if progress is to be achieved.

[02] Finance Minister presents 1999 budgets before the House

Presenting the 1999 state budgets to the House Finance Committee, Mr Christodoulou said that, barring any unforeseen negative developments, the growth rate of the economy next year will reach 4,0 per cent.

He said the current rate of growth was 4,7 per cent in real terms compared to 2,5 per cent in 1997 and 2,2 per cent in 1996. He described today's rate as "particularly important" when taking into account the EU average of between 2,0 and 2,5 per cent.

The Minister said that this growth was mainly based on the services sector and gave tourist figures as an example, saying that arrivals rose by 9,3 per cent in the first half of this year, compared with 1,5 per cent during the same period last year.

He added that other encouraging trends were a 4,2 per cent increase in the export of industrial goods, while even the agricultural sector preliminary figures show a growth rate of 6,6 per cent after a fall of 14 per cent in 1997.

He forecast that both unemployment and inflation rates will be around 3,0 per cent, while the fiscal deficit would increase to 6,3 per cent of Gross Domestic Product (GDP), leading to a public debt of 61,7 per cent of GDP.

The Minister said that adjustments in VAT and other indirect taxation would have to be made in order to deal with a higher fiscal deficit and boost public revenue.

Total revenue for the three 1999 state budgets, the Ordinary Budget, the Development Budget and the Relief Fund for Displaced and Afflicted Persons, reach 1106,7 million Cyprus pounds, while expenditure is 1695,8 million pounds (one Cyprus pound is trading at 2,0 US dollars).

Mr Christodoulou said the budgets aim at modernising and technologically upgrading the island's businesses, as well as supporting the island's EU harmonisation process and restructuring of all of the economy's sectors.

From the Republic of Cyprus Press and Information Office (PIO) Server at http://www.pio.gov.cy/

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