Cyprus economy grows in first quarter for first time since mid-2011

NICOSIA (Reuters) - Cyprus's economy grew 1.6 percent in the first quarter, flash data showed on Wednesday, expanding for the first time since it entered recession in mid-2011 and was forced to accept a financial bailout two years later. Economic output from January to March also rose by 0.2 percent on a year-on-year basis, improving from the fourth quarter of last year when the economy shrank a revised 1.8 percent. The island had been mired in recession since the third quarter of 2011, albeit at a shallower rate in the past year. Cypriot Finance Minister Haris Georgiades said the island was in the early stages of economic recovery, but warned against complacency. "We have some way to go. Recovery is at its early stages, and is therefore fragile," he said in a written statement. Private demand grew in the first quarter, focused on trade, the hospitality industry and professional services, the statistics department said. Manufacturing and construction saw a decline in output, it added. Cyprus is going through a three-year economic adjustment programme, as mandated by the EU and the IMF when they struck a 10 billion euro bailout deal with the country in early 2013. It is due to exit the programme in early 2016. In its May 5 forecast, the European Commission said Cyprus's economy would contract by 0.5 percent in 2015 before returning to growth next year with an expansion of 1.4 percent. (Reporting by Michele Kambas; Editing by Alison Williams and Hugh Lawson)