Plunging Cyprus Tourism Threatens Recession

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Cyprus tourist arrivals plunged 10.9 percent in the first seven months of 2009, acting as the engine for pushing the island into recession, official figures showed on Thursday.
The recession in Europe is having negatively affecting the island's tourism-driven economy.

January-July tourist arrivals fell to 1.18 million from 1.33 million a year earlier. In July alone, they dropped 11.2 percent.

There was a hefty 16.8 percent decline in arrivals from Britain, the island's biggest source of holiday-makers holiday market; a decrease of 15.6 per cent from Russia and an 8.2 percent dip from Sweden.

For the whole year, the government forecasts a 10 percent decline.

Tourism contributes around 12 percent of the island's GDP, and a fall in revenues has been instrumental in the Cypriot economy going into decline.

Cyprus has technically been in recession since June, after second-quarter GDP slipped 0.5 percent. That followed a 0.6 percent drop in the first three months of the year.

The government is forecasting that the final six months of the year will see an improvement, with overall GDP rising one percent. The European Commission is estimating a more modest 0.3 percent, which would still make Cyprus the only eurozone country to register positive growth in 2009.

To help ease the crisis, the government is urging Cypriots to holiday at home by offering subsidized hotel stays for lower income groups.(AFP)

Beirut, 20 Aug 09, 15:45


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