Under the new circumstances of mass unemployment and loss of confidence, the Government adopted a dual approach. On the one hand, the first priority was the provision of relief assistance to the displaced and the needy to meet their basic subsistence needs. On the other hand, the long-term approach necessitated that Government policy arrest the economic slide and lay the foundations for economic recovery and the creation of employment opportunities. Both objectives depended on expansionary, fiscal and monetary policies, the promotion of labour intensive projects and the implementation of a large number of specific programmes and projects. Therefore, although the principles of indicative planning were not abandoned, initially Government intervention was of necessity greater. With reactivation, the role of the private sector was restored.

With well-coordinated and collective action, Cyprus was able to overcome the destabilising effects of the Turkish invasion and to attain a very high rate of economic growth. However, success had its price, since the increased dependence of the country on foreign sources was translated into a large and growing foreign debt and inflationary pressures.

The progress in the economic field is indicated by the impressive rate of real growth, which over the period 1976-81 averaged about 8,5% per annum. This emanated from the excellent performance of exports of goods and services which grew on average by 11% and 18% in constant terms, respectively. The leading sectors were manufacturing, tourism and construction.

Source: www.kypros.org