Nobody doubts that, after such a severe blow to its lucrative banking sector, Cyprus will be pushed into a harsh recession. Some sources in the troika tentatively estimate GDP will shrink by about 10% before any hope of recovery.
Perhaps the biggest question is this: once the banks have been cleaned up and shrunk, where will Cyprus find economic growth? The promise of offshore gas deposits is still too uncertain, and tourism may decline if Russians suddenly find the island less hospitable for their money.
The Cyprus bail-out: A better deal, but still painful | The Economist.