We need to safeguard the economy’s upward trend, Finance Minister says

We need to safeguard the economy’s upward trend as this is reflected in the latest rating actions, Makis Keravnos, Minister of Finance Makis Keravnos has said.

His comments came as international rating agency, Fitch, on Friday, 8 December changed Cyprus’ long-term credit rating outlook to positive from stable.

“This upgrade, as the previous ones underscore that the economy remains resilient and is on a healthy course which should be safeguarded,” Keravnos said in statements following a signing of a Treaty for the Avoidance of Double Taxation with France on 11 December.

Recalling that Cyprus’ credit rating is two notches above the investment grade boundary on the Fitch rating scale, Keravnos noted that the upgrade of the outlook to positive means “we will possibly have another upgrade by this agency.” Fitch upgraded Cyprus' rating in March 2023 by one notch to BBB.

Replying to questions, Keravnos also welcomed the 8 December vote in the Parliament on the government’s bills on the foreclosure framework.

This was a collective effort, in the context of an understanding for a stable framework on foreclosures which has been troubling the Cypriot economy and society for years on the one hand, while creating an additional safety net for vulnerable groups of the population on the other, he said.

Asked on the concerns over the increase of the public sector wage bill as stipulated in the 2024 state budget, Keravnos said the high level of the wage bill was firstly identified by the Finance Ministry, recalling that the Ministry decided to present the Council of Ministers detailed report on new hirings once every year, while it assigned an external advisor to undertake a study on the rationalisation of the public sector wage bill.

“We have drafted a budget with fail safe clauses that will not allow (the wage bill) to go out of control. We simply, acting as a precaution, need to see how the public sector wage bill could be rationalised and we should not forget there is a private sector in Cyprus as well,” he added.

Furthermore, commenting on protests by the low-earners in the public sector, Keravnos recalled that the government has submitted proposals that would benefit all low-earners in the public sector, noting that more contacts with trade unions are underway.

(Source: CNA)