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The Cypriot economy expanded 3.4 per cent in the first quarter of the year, compared to the respective three-month period of 2016, and a seasonally adjusted 3.3 per cent, the statistical service said citing a flash estimate.

Compared to October to December, the Cypriot economy grew 0.6 per cent in the first quarter, Cystat said in a statement on its website on Tuesday.

The acceleration of growth in the first quarter was mainly on increased activity in hotels and restaurants, retail and wholesale trade, construction and manufacturing, Cystat said. Financial intermediaries saw their output drop.

The Cypriot economy grew in the first quarter of last year an annual 2.3 per cent and a quarterly 0.3 per cent. Economic growth for the entire 2016 was 2.8 per cent.

In a first reaction, President Nicos Anastasiades said that the first quarter growth figure “exceeded any optimistic forecast,” while Finance Minister Harris Georgiades said that it confirmed the island’s prospects.