Following yesterday's Cabinet meeting, Finance Minister Takis Klerides reported that the Budget for 2002 has been approved and is in fact in line with Cyprus' economic accession program. The budget will be submitted to the House of Representatives for endorsement. The country aims to balance the budget according to EU directives by 2004.

The Budget provides for expenditure of CYP 2.7 billion, an increase of CYP 2.3 billion to last year's and revenue of CYP 2.07 billion, resulting in a deficit of around CYP 655.6 million. The deficit will however be lower than this year's estimated figure of CYP 704.4 million.

Mr. Klerides stated that the basic economic indicators are satisfactory and the economy is growing at around 4.5% for this year with a forecasted 4% for 2002, resulting in average growth of over 2.8% which is higher than growth projected for European Union countries. Inflation is expected to remain at around 1.9%. Reduction of imports is expected to contribute towards an improvement on the balance of payments, with the deficit being restricted to around 4.7% of Gross Domestic Product.