Brussels, 07/11/2013 (Agence Europe) - On Thursday 7 November, the troika of lenders (European Commission, European Central Bank and International Monetary Fund) made a positive assessment of the Cypriot structural adjustment programme, noting in a press release that “all fiscal targets have been met with considerable margins, reflecting the ambitious fiscal consolidation underway”. As of 1 October, the island achieved a primary budget surplus of 0.7% of GDP. The public deficit for 2014 is expected to be around 1% lower than at present. The troika says that the economic situation remains difficult, although the recession has been less pronounced than expected. Based on recent indicators, output in 2013 is projected to contract by about 7.7 per cent, about 1 percentage point less than originally envisaged. The troika notes: “Looking forward, given the significant need to reduce high levels of private sector debt, output is expected to contract by 4.8 per cent in 2014 (Ed: rather than 3.9%), and to recover only gradually starting in 2015, driven by non-financial services”. The lenders say the biggest challenge is restoring healthy bank balance sheets and trust among savers. (EL/transl.fl)