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Cyprus Unemployed Rises 30% in May as Retail, Building Shrinks

The number of people without work in Cyprus increased 30 percent in May from the same month in 2012 led by retail job losses, the island’s statistical agency said.

The number of individuals registered at the country’s District Labor Offices stood at 44,424 in May from 34,162 in the same period last year. Job losses were mainly observed in the retail, construction and manufacturing industries as well as in the country’s civil service, according to a statement on the Cyprus Statistical Service’s website.

The retail industry alone saw 2,464 more workers without jobs and the number of construction workers without work increased by 1,242, amid a slump in demand for new real estate. The number of unemployed civil servants rose by 1,391, the agency said

Cyprus agreed on March 25 to a 10 billion-euro ($13.1 billion) loan from the euro area and the International Monetary Fund in return for measures including a tax on bank deposits of more than 100,000 euros at Bank of Cyprus Plc and Cyprus Popular Bank Pcl, the country’s two largest lenders. Those concessions were demanded by creditors in a bid to shrink the country’s banking industry.

Other conditions attached to the loan include cutbacks in the civil service workforce. The Cypriot economy is expected to contract as much as 13 percent this year and next under the weight of the terms reached with international creditors.

The statistics agency didn’t give an unemployment rate for the month. Cyprus’s unemployment rate was 11.8 percent in 2012. The level will peak at 16.9 percent in 2014 from 15.5 percent this year as the economy contracts 8.7 percent in 2013 and 3.9 percent next year, the IMF said in a May 17 report.

The impact of the country’s banking crisis on growth and on the country’s fiscal consolidation is “highly uncertain,” the IMF said.

To contact the reporters on this story: Georgios Georgiou in Athens at ggeorgiou5@bloomberg.net; Paul Tugwell in Athens at ptugwell1@bloomberg.net

To contact the editor responsible for this story: Maria Petrakis at mpetrakis@bloomberg.net

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