Cyprus’s beleaguered economy recorded marginal GDP growth of 0.4 per cent in the second quarter compared with zero growth in the first three months, an official flash estimate showed yesterday.

The second-quarter ended before munitions exploded at a naval base on July 11, which destroyed the island’s main power plant and sent the struggling economy into a tail-spin.

Due to the resulting energy crisis and the millions needed to rebuild the island’s biggest power plant, economic growth for 2011 is expected to be flat.

The statistical service said “positive growth rates were recorded in the sectors of tourism, trade, banking and services” while the secondary sector of the economy, construction and manufacturing , continues to “present negative growth rates”.

According to the estimate, real GDP grew 1.4 per cent in the second quarter from the corresponding quarter of 2010.

Tourist arrivals for the first seven months of 2011 were up 12.6 per cent over last year.

Based on improved tourism figures, the finance ministry had forecast 1.5 per cent GDP growth for this year and 2.5 per cent in 2012, but the explosion blew those estimates out the water.

The island’s tourism-driven economy grew by one per cent in 2010 following an unprecedented recession in 2009, when it shrank 1.7 per cent.