Cypriot economy

President urges swift progress on tax reform

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President urges swift progress on tax reform

President Nikos Christodoulides met with the advisory committee on tax reform and asked for progress to be accelerated in order to reap benefits at the earliest opportunity. The tax reform aims to encourage entrepreneurship, relieve households, have a strong social character, and contribute to the fair distribution of income. The reform also aims to address tax evasion and avoidance and be fiscally neutral. The University of Cyprus has been asked to intensify the pace of work on the tax reform. The green transition and green taxation are part of the tax report, with compensatory measures under consideration. The committee assesses proposals from various groups to form a comprehensive opinion. Tax reform is not just about tax collection but aims to improve the finances of households and businesses and keep the economy competitive.

CCLEI economic indicator about to flatline

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CCLEI economic indicator about to flatline

The Cyprus Composite Leading Economic Index (CCLEI) is showing a downward trend and is about to flatline at 0% growth.

Finance Ministry welcomes review results, reaffirms commitment to economic stability

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Finance Ministry welcomes review results, reaffirms commitment to economic stability

– The European Commission’s recent in-depth review highlighted that Cyprus’ economy is on a healthy trajectory, with GDP expected to grow and inflation to decrease.
– The moderation in GDP growth in 2023 was primarily attributed to weaker external demand for financial and business services influenced by Russia’s invasion of Ukraine.
– The government is focused on implementing policies to correct imbalances and enhance the competitiveness of the Cypriot economy, with emphasis on green and digital transitions.
– The Cyprus Recovery and Resilience Plan includes significant reforms to reduce macroeconomic vulnerabilities and expand the productive base of the economy.
– Public and private debt have decreased and are expected to continue decreasing in the coming years.
– Non-performing loans in the banking sector have declined, and the possibility of new non-performing loans is viewed as remote.
– Cyprus’ integration with both EU and non-EU economies makes it vulnerable to risks from geopolitical and trade tensions.

European commission highlights Cyprus’s economic growth

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European commission highlights Cyprus’s economic growth

The European Commission’s report on the Cypriot economy highlights the observed economic growth, reduction in inflation, and ongoing correction of macroeconomic imbalances. The report identifies macroeconomic imbalances in public, private, and external debt, with improvements seen in the net international investment position and decreasing levels of public and private debt. The review also emphasizes Cyprus’ vulnerability to geopolitical developments due to its trade ties with European and third-country economies. The EC forecasts a growth rate of 2.4% for 2023, increasing to around 3% in 2024 and 2025, with a reduction in inflation and unemployment expected. The Ministry of Finance welcomes the results of the review, noting the government’s efforts to correct imbalances and strengthen the competitiveness of the Cypriot economy through policies focused on green and digital transition. The Cypriot Recovery and Resilience Plan includes reforms aimed at reducing vulnerabilities and ensuring macroeconomic stability and public finance sustainability.