Tourism taking the edge off Cyprus recession

Buoyed by tourism income, Cyprus's recession-hit economy contracted by a slower 0.3 percent in the second quarter down from the 0.6 percent drop in the previous three months, official figures showed Wednesday.
Although it was the 12th successive negative quarter for the Mediterranean island's battered economy, the figures were unchanged from a flash estimate issued on August 14. It is the slowest rate of decline since the first quarter of 2012.
The latest estimate shows that real GDP, based on seasonally and working day-adjusted data, shrank 2.5 percent in the April-June quarter of 2013. In January-March the economy contracted 3.9 percent.
International lenders have revised down their contraction forecast for 2014 from 4.8 percent to 4.2 percent. The Cyprus economy contracted 5.4 percent in 2013.
Due to high unemployment, hovering at around 17 percent, and a mountain of bad debt, the expected recovery next year has been halved from the initial 0.9 percent lenders predicted to 0.4 percent.
The state statistical service said on Wednesday there were positive growth rates in tourism and trade.
But there was negative growth in many other sectors, including construction, manufacturing, transport and banking.
Tourism has been the one bright spot in the economy with January to July arrivals up 5.9 percent on last year and revenues improving 8.6 percent in the first five months.
Tourist income accounts for around 10 percent of GDP.
Cyprus has undergone four successful reviews by the "troika" of lenders -- the European Commission, European Central Bank and International Monetary Fund -- who granted it a 10-billion euro loan last year to bail out the economy.
But the troika will withhold the next tranche of the bailout unless parliament this week passes a crucial law speeding up foreclosures of non-performing bank loans.
Around 45 percent of loans by Cyprus banks are classed as non-performing because borrowers are seriously late with their payments, and under current laws it can take banks 20 years to regain the loan through the courts.
Parliament has several times delayed a vote on the foreclosures bill amid opposition fears it could lead to owner-occupiers being evicted from their homes but a final deadline now looms.