NICOSIA, Oct. 16 (Xinhua) -- Cyprus will start abolishing austerity measures in 2016, one year earlier than scheduled, thanks to its good economic performance this year.
Finance Minister Harris Georgiades said Friday that public sector employees promoted to high posts will start receiving corresponding salary as of Jan. 1, 2016, instead as of 2017.
International lenders had banned any promotions, but later consented to have high administration posts filled, but provided that the holders would not get any salary benefits before 2017.
Cyprus signed up to a 10-billion-euro (about 11.3 billion-U.S.-dollar)bailout accord with the European Union and the the International Monetary Fund (IMF) in early 2013.
Cypriot public sector employees lost almost one quarter of their takings and had to face tax hikes as part of the austerity program dictated by the international lenders.
Private sector was even worse, where unemployment soared to over 17 percent from around 12.5 percent in 2012.
Cypriot economy, which bottomed out last year after 11 consecutive quarters of contraction, recovered much faster and to a bigger extent than the international lenders had expected.
GDP growth for 2016 is expected to reach nearly 1.8 percent, beating the 1.4 percent predicted by the troika of international lenders -- the European Commission, the IMF and the European Central Bank -- while GDP rise is projected to climb to 2-2.2 percent in 2017 and 2018, a finance ministry report said.
It also predicted that the sovereign debt currently standing at about 107.5 percent of GDP will shrink to under 100 percent in 2018.
Meanwhile, unemployment rate will hover at some 15 percent next year and drop in 2018 to 12.4 percent, its level before the bailout.
"The better-than-expected development of economy, in combination with the gradual restructuring of the banking sector, has contributed to improved confidence," the report said.
Unlike Greece, Cyprus insisted on diligently applying reform and austerity measures as demanded by its lenders throughout the three-year adjustment program, without cashing 4 billion euros (about 4.5 billion U.S. dollars) of its assistance program.
Cypriot President Nicos Anastasiades has said the island's fast improving economy offers vast opportunities to overseas investors, inviting them to share development profits.
