2010.09.0806:20:00UTC+00Cyprus Q2 GDP Growth Better Than Estimated

Cyprus' economy grew at a faster than estimated pace during the second quarter, official data showed Wednesday.

Gross domestic product, or GDP, grew a seasonally and working day adjusted 0.6% quarter-on-quarter between April and June, the statistical office said. The figure is better than the initial estimate of 0.4%. The economy expanded for the second straight quarter. In the first three months of the year, the economy expanded an upwardly revised 0.4%, which was the first increase since the third quarter of 2008.

On a year-on-year basis, GDP increased 0.2% in the second quarter, in contrast to the 0.2% decline estimated earlier. This followed a 1.2% contraction in the previous three months, revised from a 1.4% shrinkage reported earlier.

Unadjusted GDP grew 0.5% from the same period last year, after a 1.3% slump in the first quarter. The statistical agency had earlier estimated a 0.1% growth for the second quarter and a 1.4% contraction for the first three months of the year. The latest growth is the first in five quarters.

"The improvement observed in the economy, in relation to the previous quarters, is mainly attributed to the positive growth rates continuously recorded in the banking activities and those of the services sector, as well as the improved performances observed during the second quarter in the remaining activities of the economy," the statistical office said.

Cyprus is set to return to growth in 2011, but intensified efforts are required to reverse its huge deficits as current external risks weigh on the country's growth prospects, the International Monetary Fund said in July. The lender expects growth to be around zero or slightly below in 2010, followed by a modest recovery in 2011 and a gradual acceleration in later years.

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