In Brief
Cyprus sees economy expanding by 3.7 pct NICOSIA (Reuters) – Cyprus expects its economy to expand by around 3.7 percent in 2009, the eurozone newcomer said yesterday, saying a drop in demand had tempered the outlook for next year. The Mediterranean island expects growth of close to 4.0 percent in 2008. Authorities said there had been a tapering off in private demand in recent months and that was now being factored into the economic outlook for next year. «We do expect a slowdown in consumption,» Finance Minister Charilaos Stavrakis told a news conference. The decline started four months ago with the rate of decline accelerating in September, he said. Cypriots are generally high spenders, but data cited by Stavrakis suggested global financial turmoil appeared to be finally catching up with them; the rate of growth in VAT earnings, a sales tax, had fallen to 10 percent in September compared to growth rates of 18-20 percent at the start of the year, the Cypriot official said. No collapse risk for Turkish banks The Turkish banking system doesn’t face any risks due to the collapse of Lehman Brothers Holdings Inc, the country’s chief regulator said yesterday. Counter-party risk is under constant surveillance and there are no trades with Lehman that present a threat to any Turkish bank, Tevfik Bilgin, the chief regulator, said in a telephone interview from Istanbul yesterday. Banks and financial institutions around the world are reviewing their holdings after Lehman Brothers filed for Chapter 11 bankruptcy protection in the latest development in the global credit crunch that has led to more than $500 billion in write-downs. (Bloomberg) Upward revision Romania’s government raised its economic growth forecast for this year after the Agriculture Ministry said the harvest will more than double. The economy will probably grow 9 percent this year after 6.6 percent last year, above the previous state forecasts of 8 percent, Prime Minister Calin Tariceanu said in a speech to parliament in Bucharest yesterday. The 2008 wheat and rye harvest will more than double to 7.8 million metric tons after a drought destroyed a third of crops last year, the Agriculture Ministry predicted on May 14. Economic growth accelerated to an annual 9.3 percent from 8.2 percent in the first quarter, the National Statistics Institute said on September 1. Tariceanu, facing national elections in November, made the speech to Parliament to summarize his four-year term. He also said economic growth has created 600,000 jobs since he was elected in 2004 and annual foreign direct investment has doubled. (Bloomberg) Oil stakes OMV AG, Central Europe’s biggest oil company, raised its stake in Petrol Ofisi AS, a Turkish chain of gas stations, to 41.6 percent. OMV paid 2.47 million liras ($2 million) for 405,000 shares, the company said in a filing with the Istanbul Stock Exchange late yesterday. The purchase doesn’t give OMV any additional control over the company, the statement said. (Bloomberg)
