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Cyprus' creditors say bailout program on course, authorities must deal with bad loans

Cyprus' international creditors say the country's bailout program is making good progress as fiscal targets have been comfortably met, welfare reform has move forward and more steps have been taken to shore up the weak banking sector.

But a fifth bailout review completed Friday urged authorities to tackle the high number of bad loans which are a drag on economic growth because banks aren't lending.

In a statement, the European Commission, the European Central Bank and the International Monetary Fund say quickly passing foreclosure and insolvency laws is key to getting borrowers to pay off debt as bad loans account for more than half of all loans.

The economy is projected to shrink 4.2 percent this year, but grow by 0.4 percent in 2015.