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IMF Urges Action On Cyprus’s Non-Performing Loans

by THEFUTURE.TEAM

June 10, 2024

The International Monetary Fund (IMF) has urged Cyprus to take decisive action to address the persistent issue of non-performing loans (NPLs), highlighting it as a critical factor for the island’s financial stability. While commending Cyprus for its economic recovery and fiscal discipline, the IMF emphasised the need for reducing public debt and maintaining primary surpluses until the debt-to-GDP ratio falls below 60%.

Persistent NPL Challenge

Despite significant progress in recent years, NPLs remain a substantial concern for Cyprus’s banking sector. The IMF advised Cypriot authorities to leverage the newly amended foreclosure framework and the “Rent-to-Own” scheme to accelerate the resolution of these problematic loans. This is especially pertinent in the current economic climate, influenced by the repercussions of the Ukraine conflict, sanctions, and rising interest rates.

The high percentage of NPLs poses potential risks that could undermine the country’s financial stability. Effective management of these loans is crucial to prevent adverse impacts on the banking sector and the broader economy.

Banking Sector and Economic Implications

The Ministry of Finance has echoed these concerns, noting the risks posed by the banking sector’s developments in its strategic fiscal policy framework for 2025-2028. Although strong capital positions and excess liquidity support the banking system, the persistent issue of NPLs requires ongoing attention and comprehensive solutions.

Furthermore, the IMF underscored the importance of improving oversight of semi-governmental organisations and addressing deficits in the State Health Services Organisation (SHSO). The state’s financial support for SHSO, particularly strained by the pandemic, remains a critical fiscal issue.

Strategic Recommendations

For business professionals and investors, the IMF’s recommendations highlight key focus areas within the Cypriot economy. The call for robust action on NPLs suggests opportunities for investment in financial services aimed at loan recovery and restructuring. Additionally, reforms in the healthcare sector could present prospects for private sector involvement and investment in healthcare infrastructure and services.

The IMF’s emphasis on maintaining fiscal discipline and reducing public debt indicates a stable macroeconomic environment conducive to long-term investments. Entrepreneurs and business leaders should consider these dynamics when planning their strategies in Cyprus.

Record: One In Every $10 Spent Worldwide Is On Travel

by THEFUTURE.TEAM

September 4, 2024

A record $1 in every $10 spent globally in 2024 will be on travel, according to the World Travel and Tourism Council’s (WTTC) annual report.

KEY FACTS

The travel and tourism industry’s contribution to global gross domestic product is expected to reach a new record as consumers view travel as an increasingly essential part of their budget.
The WTTC forecasts that the industry’s contribution to global GDP this year will increase by 12.1% year-on-year to $11.1 trillion. dollars, which represents 10 percent of the world’s gross domestic product.
Travel spending in the US, Chinese and German economies is expected to contribute the most to GDP.
The sector will support nearly 348 million jobs in 2024, or 13.6 million positions more than in 2019 – the previous record before the pandemic. The industry is still hiring to fill positions in the fast-growing field.

IMPORTANT QUOTE

“Despite some concerns last year about us entering a global recession and accelerating inflation, this year we believe travel and tourism are a real economic force globally,” said the NGO’s chief executive Julia Simpson, quoted by Reuters.