Cypriot Bailout Program Faces ‘Unusually High’ Risks, IMF Says
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Cyprus may need additional financing if its economy contracts more than expected or there are slippages in implementing the terms of its bailout program with the euro area and International Monetary Fund, IMF staff said.
The impact of Cyprus’s banking crisis on gross domestic product and on the country’s fiscal consolidation is “highly uncertain,” the Washington-based institution said in a staff report today. This means risks to the outlook are “substantial and tilted to the downside” as problems would adversely affect the trajectory of Cyprus’s public debt.