European Commission says Cyprus is on track despite huge hikes to unemployment forecasts

The European Commission has announced that Cyprus' economic programme is on track, with modest growth expected to return in 2015 (release).

That will follow a forecast cumulative contraction of 13 per cent in 2013/14, and an 8.7 per cent contraction this year. However the EC noted that downside risks remain substantial.

The island's public debt is expected to peak at 126.9 per cent, and unemployment is said to be rising "faster than anticipated". EC unemployment forecasts have been revised sharply up to 17 per cent in 2013, and 19.6 per cent in 2014.