The economy has exited the recession in the first half of 2010, with a stable growth throughout the year, stated Government Spokesman Stephanos Stephanou, commenting on a European Commission report on the Cypriot economy.

“The report notes that the economy will continue to recover in 2011 and gain momentum in 2012. The rate of growth will range from 1.5 and 2.4 percent in 2012”, he added.

Furthermore, the report notes the economic development will boost the labour market and unemployment will gradually drop to 6.3 percent this year and 5.3 percent inn 2012.

In addition, the report forecasts that inflation will remain under control and in 2012 will likely remain contained and approach the euro-area average in 2012.

It also predicts strengthening Cyprus role as a regional centre, and names Cyprus a safe haven in tourism, trade and maritime.

Regarding newspaper reports that MOODY'S Investors Service placed three Cypriot banks on review for a possible downgrade , citing heightened risks to the banks from their exposure to Greek debt, the Spokesman recalled that the government has expressed its trust to the island’s banking system.

At the same time, he said, when the financial crisis started, the government took a series of measures to support the banking system which is a vital element of the Republic’s economy.

Stephanou said the banking sector is also a matter for the Central Bank and the banks themselves, adding that the issue will be looked into when the time comes.

Noting the government has never shared what the investors’ services have said about the Cypriot banking system, the Spokesman concluded “we trust the Cypriot banking system”.