Euro zone member Cyprus failed to come out of a recession in the last quarter of 2009, having recorded quarterly contractions throughout the year, statistics showed on Friday.

For the whole of 2009, GDP growth contracted by 1.7 percent, the statistics department said.

"Numerically the recession is more shallow than elsewhere, but we must also bear in mind that Cyprus is not used to negative rates of growth," said Pambos Papageorgiou, an economic analyst.

In the final three months of the year, the east Mediterranean island saw its economy shrink 0.3 percent, compared to -0.8 percent in the third quarter, statistics showed.

On a year on year basis, real GDP fell 3 percent in the fourth quarter, after declining 2.8 percent in the third quarter.

The island's statistics service pinned the economy's contraction on the poor growth performances by the construction and tourism sectors, which took a hammering following the global financial crisis.

"On the other hand, the broad services sector and the financial intermediation activities recorded positive growth rates," the statistics department said in a statement.

Cyprus tumbled into negative growth rates on a collapse of its real estate market and tourism arrivals, which fell 10.9 percent in 2009. Its economy has links to Britain, its primary tourism market, and Russia and Greece, key business partners.

Tourism represents almost 11 percent of the island's gross domestic product.

A domestic economic rebound would depend in part on the economic performance of all three countries. "I maintain a mild optimism that we will see a mild rebound in the second quarter, albeit an anaemic one," Papageorgiou said.

Cyprus is the second-smallest economy in the 16 member euro zone, with a GDP worth an estimated 17.2 billion euros in 2008.

Reuters, Balkans.com Business News