Unemployment among the labour force stood at 16.2% in Cyprus for the third quarter of 2013, up by 0.7% in relation to the corresponding quarter of 2012, data released on Monday by the Cyprus Statistical Service show.
At the same time youth unemployment between people aged 15 to 24 was recorded at 38.5%, reduced by 1.8% compared to the previous quarter but marking a significant increase of 12.1% compared to the same quarter of last year. In particular, 374.8 thousand people were in employment at the 3rd quarter of 2013 (196.2 thousand men and 178.6 thousand women) while 72.7 thousand people were unemployed (38.7 thousand men and 34.0 thousand women).
The percentage of employment in people between the ages of 20 and 64 was 66.9% (72.7% men and 61.7% women) recording a drop compared to the previous quarter (67.3%) and the corresponding quarter of 2012 (70.0%). Unemployment came to 16.2% of the labour force (men 16.5% and women 16.0%) up in relation to the previous quarter (15.5%) and the same quarter of 2012 (12.1%).
However, the crisis has been stretched out for longer. The economy will shrink a further 4.8pc next year, compared with earlier assumptions of just 3.9pc. "A deeper contraction in 2014 is now envisaged, consistent with a more gradual private sector deleveraging process," said the IMF. Public debt is expected to peak at a ratio of 126pc of GDP in 2015 but it could be far worse if anything goes wrong. "Public debt sustainability remains vulnerable to shocks. Debt dynamics are particularly susceptible to growth shocks: a deeper or more protracted recession would lead to a debt ratio of 130pc to 145pc of GDP by 2020," it said.
This could rise to 170pc if interest rates are higher than assumed, requiring "additional financing measures and commitments from European partners to protect Cyprus’s debt sustainability" - a warning that EMU taxpayers may have to dip into their pockets to stabilise the country in the end. The picture remains dire. Bad loans in the banking system are running at 46pc, rising to 60pc in real estate, though the loss of deposits from the banks has slowed under the country's capital controls. Bank of Cyprus has lost 40pc of its deposits over the past year. The country's external debt is still 350pc of GDP.
"Risks to the medium-term outlook remain tilted to the downside. While the 2013 growth outlook may be better than projected, the private sector’s deleveraging could be more protracted, liquidity conditions for companies may tighten further and consumers may exhaust liquidity buffers," the IMF said.
"These, combined with a continued contractionary fiscal impulse, could lead to a deeper and more prolonged recession, as well as a slower recovery over the medium term. Negative feedback loops and a tightening of bank-sovereign links could re-emerge, posing risks to growth and debt sustainability."
A putative bonanza from vast reserves of oil and gas offshore may be hard to extract and take years to come on stream. Nobel Energy, which is exploring the region, said talk of $60bn of oil in the so-called "Block 12" sector was overblown, and may not come to much.
The one bright spot is tourism from Russia, which is enjoying an explosive growth as the country slips into a new economic and cultural orbit.
