The IMF says Cyprus’ bailout program remains on track but the country’s long-term economic outlook remains “challenging,” nine-months into the country’s €10bn emergency bailout program.

The IMF, following last month’s third review of the program by a ‘Troika’ consisting of the IMF, EU and European Central Bank, says that fiscal targets for 2013 have been met by a considerable margin, due to both continued spending cuts and a less severe recession than anticipated. Cyprus’ GDP contracted by about 6% last year, according to provisional IMF figures. This is almost two percentage points less bad than the figure given in the Troika’s previous review two months’ earlier (see graph). But 2014 growth estimates have been revised down to -4.8% from -3.9% in September’s first review (MEES, 20 September 2013). (CONTINUED - 294 WORDS)