Commission's forecast makes clear that the Cypriot economy is resilient, Minister says

The message sent out by the European Commission's spring forecast makes clear that the Cypriot economy is stable and resilient, Finance Minister Makis Keravnos has said.

He was speaking on the sidelines of his participation in a 5 June meeting of the parliamentary Defence Committee.

Keravnos noted that the forecast sets out criteria for determining the economic situation of various member states and described as very important and significant the fact “that the European Commission has made it absolutely clear that the Cypriot economy is now in a state of stability and resilience, on a path of continuous growth, and has avoided any macroeconomic imbalance”.

He added that “this is a very important development after so many years of doubts about the resilience and macroeconomic performance of the Cypriot economy”.

Keravnos also referred to the Commission's preliminary assessment of the possibility of exceeding the spending ceiling, saying that “it is a preliminary assessment” and added that “the final assessment will be in September and this also applies to other countries that are growing at a good pace, creating the possibility for spending to increase”.

He also said that the issue has already been discussed in the EU Finance Ministers Council for countries that have already announced significantly increased spending. “Therefore, what emerges from this forecast is that the Cypriot economy is continuing on a path of reducing its public debt, which will fall below 60% this year”, the Minister stressed.

He then said that the Cypriot economy is generating surpluses to meet its financial obligations, but also to be able to implement the social policy and continue on a stable growth path.

Responding to a question about warnings regarding inflexible spending, he said that "we were the first to mention in the first budget prepared by this government that this is an issue that concerns us", adding that at the moment, some specific studies are being carried out on this issue, based on the overall study conducted by the IMF, with a view to reducing the increase rate of public sector wage costs in the medium term.

He also pointed out that "the budget submitted in 2025 did not include any new positions, but rather fewer positions, and in fact the wage bill was several thousand lower than in the 2024 budget”.

(Source: CNA)