Economy of Cyprus

NICOSIA, July 12 (Reuter) - The economy of Cyprus recovered in 1994 and is expected to continue strong growth this year, the Central Bank said on Wednesday in its annual report.

The report said Gross Domestic Product (GDP) grew by 5.1 percent to 3.5 billion Cyprus pounds ($7 billion) in 1994 compared to a GDP of $3.2 billion ($6.4 billion) in 1993 when growth was only 1.6 percent. The bank predicted four percent GDP growth in 1995 and a decline in inflation levels to 4.0 percent from 4.7 percent in 1994.

The deficit as a percentage of the GDP fell to 1.5 percent last year and the Bank said this put the Mediterranean resort island, which has applied for European Union membership, well within a range specified by the EU. The public sector deficit stands at 52.9 million pounds ($121 million), down from 77.1 million pounds ($176 million) in 1993.

Cyprus has experienced strong growth in its vital tourist sector and is a significant regional business and banking hub.