NICOSIA, May 28 (Xinhua) -- All previous projections on Cyprus' economy have been thrown "upside down" by the coronavirus pandemic crisis as the economy is expected to undergo a "serious recession" in 2020, said Constantinos Herodotou, governor of the Central Bank of Cyprus (CBC), on Thursday.

"The economy's prospects for 2020 and afterwards are dramatically overshadowed by the negative developments of the coronavirus pandemic," Herodotou said in an introductory note included in the central bank's annual report for 2019.

Herodotou said that factors other than the pandemic continue to present general downward risks for the Cypriot economy, which could decelerate its future course.

He listed external geopolitical developments, Brexit, trade tensions and the high level of private debt in addition to the challenges faced by the banking sector.

"We will have to face (these risks) even after the pandemic, but to an obviously greater degree," Herodotou added.

He said that the progress made in 2019 supported the fast and coordinated actions of the government and the central bank in dealing with the economic impact of the pandemic.

Finance Minister Constantinos Petrides on Thursday detailed a 10-point plan announced by President Nicos Anastasiades in a televised address Wednesday night, aimed at pumping liquidity in the economy in the form of cash grants and cheap loans to businesses.

"After the crisis is over we will have to remain focused in the effort of full consolidation of the economy and of our banking system," said Herodotou.

"This will lay the foundations on which a long-term and at the same time sustainable growth course the Cypriot economy can be based," he added.

Previous projections by the central bank in late 2019 showed that the Cypriot economy was expected to see growth rates for 2020 to 2022 lower than that of last year.

"This projection has been turned upside down by the coronavirus pandemic," he said, adding that on this basis, "it is expected that 2020 will record a serious recession."

Herodotou said the financial impact cannot be quantified with precision for the time being, given that there is not sufficient data yet, and the pandemic's duration cannot be projected.

"Despite unprecedented developments and very negative short-term impact, we must consider how much worse the situation would be, had the progress of 2019 not been achieved both in macro-economic and fiscal policy issues as well as on matters relating to the stability of the banking and financial sector," Herodotou noted.

A report by CBC on Wednesday said the banking system managed to reduce non-performing loans, the legacy of the 2013 economic crisis, by 561 million euros, or 5.9 percent, to 8.97 billion euros at the end of 2019.

Total non-performing loans represented 27.9 percent of total loans, down from a 2014 peak of 52 percent of total loans, or over 27 billion euros. Enditem

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