NICOSIA - Unemployment is expected to rise to 19% this year, edging up about two percentage points from the previous year, the Finance Ministry said on Wednesday.
The slower increase reflects a smaller shrinking of the economy than initially projected, a reduced supply of labour from foreign and local employees and lower salaries. Labour supply was down because of retirements and emigration. The ministry said that flexible forms of employment were on the increase.
The Troika’s revised projections had unemployment rising by 4.4 percentage points in 2014. Average unemployment in 2013 was 16% -- better that Troika’s second evaluation projection of 16.7%.
The employment of non-Cypriots fell 10%, while that of Cypriots rose 1.3% compared to 2012.
Youth unemployment remained at a very high 38.8% while long term unemployment was 6.% in the third quarter of 2013 compared to 3.9% in the same period in 2012.
Four out of 10 unemployed are out of a job for more than a year. People aged between 25 and 34 are at greatest risk of long-term unemployment.
Although a recovery of the job market is possible in 2014 as conditions of deflation and lower labour costs can create new jobs, reducing unemployment remains difficult since time is needed before available job positions can counter long term unemployment.
Employment prospects are better in the private sector which can recover faster.