Eurozone member Cyprus entered recession in the three months to June, with GDP contracting 0.4 per cent quarter-on-quarter, data has showed.

'I don't think we will come out of it earlier than fourth quarter at the earliest. Hopefully, the global economic recovery will be enough to create a dynamic recovery here in Cyprus by the end of the year,' said Hellenic Bank head of economic research Michalis Florentiades.

The quarter-on-quarter drop was the second quarterly contraction in a row, after an 0.6 per cent drop in the first three months of this year. Year-on-year, second quarter gross domestic product (GDP) for Cyprus, which makes up about 0.2 per cent of the euro zone, shrank 1.1 per cent after growth of 0.9 per cent in the first three months of the year, according to a report in our sister newspaper Gulf Daily News.

'The contraction of the economy during the second quarter of 2009 is mainly attributed to the very negative growth rates observed in hotels and restaurants as well as the negative performance of manufacturing, construction, trade and transport activities,' the statistics department said.

Cyprus's tourism sector, which represents 10.6 per cent of Cyprus's GDP, suffered a blow this summer season as tourist arrivals to the island plummeted 10.9 per cent in January-July, dragging tourism earnings down 15.5 per cent over the first seven months of this year.